Corporate governance in South Africa has evolved with the release of the draft King V Code. As the latest iteration in the esteemed King Reports on Corporate Governance, King V introduces a modernised approach to ethical and effective leadership, sustainability, and accountability. This article explores the key aspects of King V and its implications for organisations.
What is King V?
King V is a framework for corporate governance that applies to all organisations, regardless of their form of incorporation. It focuses on ethical and effective leadership to achieve four primary governance outcomes:
- Ethical culture: Promoting integrity, fairness, and transparency.
- Performance: Ensuring long-term value creation within economic, social, and environmental contexts.
- Conformance: Upholding compliance with laws, regulations, and standards.
- Legitimacy: Building trust and responsible corporate citizenship.
Unlike its predecessors, King V adopts an outcomes-based approach, encouraging organisations to focus on real-world governance impacts rather than simply ticking compliance boxes. It is structured around 12 governance principles, covering leadership, strategy, ethics, risk management, remuneration, assurance, and stakeholder relationships.
Key innovations in King V
1. Integrated thinking and sustainability
King V underscores the importance of integrated thinking—acknowledging the interdependence between an organisation, the economy, society, and the environment. This means companies must align their strategies with sustainable development goals and stakeholder interests.
2. Disclosure and transparency
The framework introduces a more structured disclosure regime using an ‘apply and explain’ model, ensuring that governance practices are not only implemented but also articulated clearly to stakeholders.
3. Information and emerging technologies governance
For the first time, King V formally addresses data, AI, and emerging technologies, highlighting the need for ethical and responsible AI use, human oversight, and compliance with evolving technology regulations.
4. Risk and compliance governance
The code expands risk management to include opportunity-focused risk-taking, reinforcing that governance should not be a barrier to innovation but a means of securing sustainable growth.
5. Proportionality and adaptability
Recognising that organisations differ in size and complexity, the code allows for proportional application, meaning governance practices can be scaled appropriately while still achieving intended governance outcomes.
Comparison of King IV and King V
| Feature | King IV | King V |
|---|---|---|
| Governance approach | ‘Apply and explain’ model | Maintains ‘apply and explain’ but enhances transparency and accountability |
| Sustainability focus | Recognises sustainability but not as a primary driver | Fully integrates sustainability as a core governance principle |
| Technology governance | Limited focus on IT governance | Comprehensive inclusion of AI, data governance, and emerging technologies |
| Risk management | Primarily focuses on compliance risk | Expands to include opportunity-focused risk-taking |
| Stakeholder engagement | Encourages stakeholder inclusivity | Strengthens stakeholder accountability with clearer reporting mechanisms |
| Disclosure requirements | Focuses on general reporting | Implements structured disclosures to enhance governance transparency |
| Proportionality principle | Some flexibility for different-sized organisations | Fully integrates proportionality, allowing scalable application |
How ITLawCo can help
Navigating King V requires a deep understanding of corporate governance, risk management, and compliance—areas where ITLawCo excels. Here’s how we can assist:
- Corporate governance advisory: We provide strategic guidance to governing bodies on implementing King V principles, ensuring that leadership structures, policies, and governance frameworks align with best practices.
- AI and technology governance: As one of the few firms specialising in AI governance, we help organisations establish ethical AI frameworks, conduct AI risk assessments, and ensure compliance with local and international AI regulations.
- Risk and compliance services: ITLawCo assists in risk governance, compliance management, and assurance reviews to help organisations mitigate legal, regulatory, and operational risks while maintaining agility in decision-making.
- Legal and regulatory compliance: We ensure organisations remain compliant with King V’s legal and ethical requirements, including data governance, privacy laws (such as POPIA and GDPR), and cybersecurity frameworks.
- Board training and capacity building: ITLawCo offers tailored training sessions for board members, executives, and compliance teams, ensuring they fully understand and effectively implement King V’s governance standards.
Don’t get left behind
King V marks a transformative step in corporate governance, advocating for ethical leadership, sustainability, and responsible corporate citizenship. While its broad scope presents challenges, ITLawCo is uniquely positioned to help organisations integrate King V principles seamlessly into their operations. Whether it’s governance strategy, compliance, or emerging technology oversight, our expertise ensures that businesses not only comply with the code but leverage it as a tool for sustainable success.
Contact ITLawCo today to ensure your organisation is ready for the new era of governance.
Read the code, glossary, and disclosure
The King Committee recently announced that the King V draft is available for public comment. Submit your input via the online form by close of business on 4 April 2025. The submission is your chance to shape the future of corporate governance in South Africa. For more info, mail forums@iodsa.co.za.
