The IoDSA said King III’s 75 principles have been reduced to a mere 16 in King IV, with an additional 17th principle which is applicable to institutional investors such as retirement funds and insurance companies.
King IV has also focused on outcomes as a way of driving acceptance of corporate governance as integral to value creation by organisations characterised by an ethical culture, good performance, effective control and legitimacy. The IoDSA said that linking governance to outcomes should result in organisations practising quality governance. In this spirit, King IV emphasises not what practices have been implemented but rather what their impact has been on achieving the 16 principles. King IV has moved the regimen of “apply or explain” to “apply and explain”.
Professor Mervyn King, chair of the King Committee on Corporate Governance in South Africa said: “The overarching objective of King IV is to make corporate governance more accessible and relevant to a wider range of organisations, and to be the catalyst for a shift from a compliance-based mindset to one that sees corporate governance as a lever for value creation .”
Radical revisions and extended scope
Ansie Ramalho, King IV Report Project Lead for the IoDSA, and the task team appointed by the King Committee, introduced a number of innovations as part of the report’s revisions. They have broadened the language of the report, ensuring that the vocabulary is no longer listed company and business-specific, and have provided supplements to make it easier to adapt the code to different industry sectors, including government and nonprofits, and various organisation types. King IV also provides guidance on how to apply its practices proportionally, in line with an individual organisation’s size and resources, and the extent and complexity of its activities.