Unfortunately lots of organisations are still in denial relating to their potential corporate governance risks. Solid operational management does not necessarily equate to good corporate governance. Not being aware of any incidents in your organisation does not mean they can not happen.

 There also still exists a strong perception that corporate governance is not really that relevant to non-listed companies and NGO’s. King III and the New Companies Bill aim to change these perceptions, specifically with the creation of the broader definition of “public interest companies”. Creating and maintaining a culture of good organisational ethics would be a key requirement for business success and sustainability over the next few years. Therefore, if corporate governance is not one of your firms top three priorities you need to ask yourself: 

•         What needs to change?

•         Why does it need to change?

•         How can my organisation and stakeholders benefit from an ethical culture?

•         How does ethics culture fit in with corporate governance initiatives?

(written by Wouter Grove)

 The non-mandatory nature of these recommendations have enabled some organisations to still function without really explicit and clear commitment to changing their corporate governance and general business practices to reflect the higher levels of accountability and responsibility required by external stakeholders. The King III Report is bound to be a rather big wake-up call for those organisations that still believe that ethical leadership is optional in today’s high pressure business environment. The King III Report…” is set to shake up corporate SA. It is due for release early next year, and its recommendations will be mandatory for all public interest companies, parastatals and institutions that fall within financial market regulations.”  (Temkin, S. King of corporate governance vows a royal shake-up, Business Day, July 4, 2007.) 

The new Companies Bill, which was released earlier this year, will form the basis of the King III report.

(written by Wouter Grove)

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