CORPORATE PROCEDURES

ASSIGNMENT
18 October 2024

NAME AND STUDENT GROUP CONTRIBUTION

SURNAME NUMBER
Tekano 221482679 D 100%
Makhele
Nelisiwe Mbele 221406662 D 100%
Yonwaba 221041982 B 100%
Luzipho
Valencia 222340215 D 100%
Gaetsosiwe
Yondelani 100%
Matsheketwa
PART A
LEGAL OPINION ON CORPORATE GOVERNANCE (NB! THERES NO
LINK TO FROM PARAGRAPH 2 TO THE LAST PARAGRAPH)
In the contemporary, constantly evolving business environment, good corporate
governance has emerged as a vital component for the sustainable success of
organizations. South Africa, good corporate governance has imprinted its
significancy as a result of previous business crises and regulatory reforms. There are
several frameworks that established and guides good corporate governance
practices, King Reports, Companies Act, Financial Sector Conduct Authority (FSCA),
Johannesburg Stock Exchange Listing Requirements to mention a couple. This
essay will focus on King IV Report Framework for companies that aim to incorporate
ethical leadership, accountability and transparency in their business practices. In
order to gain equitable comprehension of good corporate governance, background
information and its significance. Secondly must acquire knowledge regarding the
evolution of corporate governance within the republic particularly under governance
of King Report as whole. Lastly the most essential information is regarding the
practical application which is multi-facetted of good corporate governance within the
business.
Corporate governance entails establishing rules, policies and processes for leading
and managing organizations, ensuring that their objectives are met ethically and
transparently (Corporate Governance Institute, 2024). It addresses strategies,
internal controls, performance metrics, and corporate disclosure. Frameworks such
as the King Reports have had a profound impact on corporate governance in South
Africa. Good governance aims to balance the interests of all stakeholders, which
include shareholders, employees, suppliers, customers, and community. It develops
effective decision-making processes and controls, which promote trust and
confidence. In result, firms can achieve outstanding governance and long-term
prosperity.
Corporate governance in South Africa has undergone significant evolution,
particularly influenced by the King Reports and legislative collectively. During
apartheid regime the three following legislation collectively formulated the corporate
governance. Which are, Companies Act(1973) which established basic governance
frameworks, shareholders’ interest and limited regulatory oversight. However due to
anti-apartheid movement, economic crisis South Africa faced, and global governance
trends’ influence the entire corporate governance formulators had to be revised.
The evolution of King Reports 1-4 reflects the changing context of corporate
governance and sustainability. The King Reports 1-4 reflects the changing the
context of corporate governance and sustainability. The King Report 1 (1994)
provided a framework for transparency and accountability in post-apartheid South
Africa(Warren & Danielle, 2020). King Report 2 (2002) broadened this approach to
include ethical leadership and risk management, as well as a more comprehensive
stakeholder view. The King Report 3 (2009) introduced integrated reporting,
emphasizing the interconnection of financial and non-financial performance and the
importance of sustainability (The role of corporate governance in South Africa, 2018).
Finally, King Report 4 (2021) expanded on these by emphasising sustainable
development, responsible corporate citizenship, digital governance that is consistent
with global expectations for corporate accountability, environmental, social and
governance(ESG) factors(Wikipedia, n.d ). Consequently, in its evolving through
time, it adopted the concept of inclusivity. Which in turn provided more adherence
and application from more companies are expected to apply and adhere to King IV
reports.
In its formation the King Report consists of objectives and principles, it has
established through time and is addressed thoroughly by King Report IV. For
companies to apply King’s reports effectively they need to acknowledge and comply
with the basic principles which are accountability, transparency , responsibility,
competency and fairness, in turn these will assist in the application, transparency,
responsibility, competency and fairness, I turn these will assist in the application of
the 17 principles to ensure adherence is as effective leadership, this will allow the
company to establish a code of conduct and its ethics training programs to make
sure that executives operates with integrity and transparency. Whereas principle 2
emphasizes the need of establishing the organization’s direction and purpose which
will enable the company to conduct regular ethics audits, and the formation o ethics
committees assist monitor and control ethical behaviour within the company.
Principles 3 and 4 emphasize attaining strategic goals and monitoring performance
while maintaining responsibility and openness. In that businesses can demonstrate
their commitment to social responsibility by participating in community development
programs and implementing sustainable environmental policies. Also, by integrating
sustainability into corporate planning and reporting on both financial and non-
financial performance helps to build long-term value. Furthermore, principles 5 and 6
advocate for effective governance frameworks and delegation of authority to
management while maintaining accountability. By conducting regular stakeholders
engagement sessions and transparent communication channels to guarantee that all
stakeholders interest are considered. In addition, the board should routinely examine
governance rules and procedures to ensure they are still effective and relevant.
Recognizing the importance of stakeholder connections. Principle 7 and 8 is equally
essential for long-term success. This will ensure diversity in the boardroom by
including individuals with the diverse talents, backgrounds, and perspectives
improves decision-making. Assigning clear delegation of authority and
responsibilities to competent management guarantees efficient operations. In terms
of ethics and compliance, principle 9 encourages the development of an ethical
culture, while principle 10 emphasizes conformity to rules and regulations . This will
encourage the company to conduct frequent performance reviews, frequently
monitoring risk appetite and tolerance levels helps manage risks and capitalize on
opportunities. Principles 11 and 12 focus on sustainability and integrated reporting,
encouraging firms to emphasize their long-term impact. In establishing IT
governance frameworks and ensuring cybersecurity measures are in place to secure
the organization’s information assets. While regular compliance audits and training
programs ensure compliance with relevant law and standards.
Furthermore, principles 13 and 14 emphasizes the importance of transparency and
accountability in operations and decision-making. This enables the company to
create a transparent remuneration strategy that matches with the company’s
performance and strategic goals which encourages fairness. By implementing
internal controls and conducting frequent audits assure the integrity of financial and
operational reporting. While principles 15 and 16 encourage the governing body to
evaluate its performance and incorporate diversity and inclusivity into its makeup.
Through regular communication and engagement which will promote trust and
support among the governing body. Regarding institutional investors’ their
responsibilities include actively engaging with the companies with the companies
they invest in to support to good governance standards. Principle 17 guarantees that
remuneration systems are fair, responsible and consistent with the organizational
objectives, reinforcing the ultimate purpose of good governance. This promotes the
provision of comprehensive reports that incorporate financial, social and
environmental performance gives stakeholders a holistic perspective of the firm.
Therefore, good corporate governance is important for the company’s success in
obtaining government contract. A company may approve staff morale and trust by
promoting ethical leadership. Clear accountability simplifies decision-making and
demonstrates effective management. Engaging stakeholders will provide useful
insights and demonstrates social responsibility. Transparency in communication
builds confidence, and a dedication to sustainability aligns with government interests.
Effective risk management tactics will protect the firm and create trust between its
partners. Implementing these principles will establish the company as corporate
governance leaders, promote long-term growth and prosperity.

REFERENCES

 The Corporate Governance Institute, 2024. What is corporate governance?

[online] Available at:
https://www.thecorporategovernanceinstitute.com/insights/lexicon/what-is-
corporate-governance/ [Accessed 21 August 2024].
 Wikipedia. (n.d.). King report on corporate governance. Available at:
https://en.m.wikipedia.org/wiki/King_Report_on_Corporate_Governance
[Accessed 26 Sep. 2024].
 Warren, M. & Danielle, C.2020.Corporate governance in South Africa.
München: De Gruyter Oldenbourg.
 Available at: The Role of Corporate Governance in South African Businesses.
(fundingconnection.co.za) [28 September 2024]