Your Company is planning to adopt a code of corporate governance based on international best practices. In this connection, Chairman wants to know about the corporate governance framework in South Africa. As a company se

To, The Chairman ----- Limited Note on Corporate Governance framework in South Africa The King Committee, a private-sector body comprising of former South African Supreme Court Judge, Mervyn King was formed in 1992, to draft corporate governance guidelines. Four reports have been issued by the King Committee since then – (King I), 1994 (King II), 2002 (King III), 2009 and (King IV) 2016. King IV requires an "Apply AND Explain" approach to disclosure. This means that application of the principles is assumed and that an explanation is disclosed on the practices that have been implemented and how these support achieving the associated governance principle. Whilst King IV is voluntary (unless prescribed by law or a stock exchange Listings Requirement) it is envisaged that it will be applicable to all organisations irrespective of their form or manner of incorporation. Principles of Corporate Governance as provided by King IV Code of Corporate Governance are – The governing body should lead ethically and effectively. The governing body should govern the ethics of the organisation in a way that supports the establishment of an ethical culture. The governing body should ensure that the organisation is and is seen to be a responsible corporate citizen. The governing body should appreciate that the organisation' score purpose, its risks and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of the value creation process. The governing body should ensure that reports issued by the organisation enable stakeholders to make informed assessments of the organisation's performance, and its short, medium and long-term prospects. The governing body should serve as the focal point and custodian of corporate governance in the organisation. The governing body should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and effectively. The governing body should ensure that its arrangements for delegation within its own structures promote independent judgement, and assist with balance of power and the effective discharge of its duties. The governing body should ensure that the evaluation of its own performance and that of its committees, its chair and its individual members, support continued improvement in its performance and effectiveness. The governing body should ensure that the appointment of, and delegation to, management contribute to role clarity and the effective exercise of authority and responsibilities. The governing body should govern risk in a way that supports the organisation in setting and achieving its strategic objectives. The governing body should govern technology and information in a way that supports the organisation setting and achieving its strategic objectives. The governing body should govern compliance with applicable laws and adopted, non-binding rules, codes and standards in a way that supports the organisation being ethical and a good corporate citizen. The governing body should ensure that the organisation remunerates fairly, responsibly and transparently so as to promote the achievement of strategic objectives and positive outcomes in the short, medium and long term. The governing body should ensure that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision-making and of the organisation's external reports. In the execution of its governance role and responsibilities, the governing body should adopt a stakeholder-inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the organisation over time. The governing body of an institutional investor organisation should ensure that responsible investment is practiced by the organisation to promote the good governance and the creation of value by the companies in which it invests. This is for your information please. Signed Company Secretary