SOUTH AFRICA—CORPORATE GOVERNANCE CODE APPLICABLE TO CSOS NOW IN EFFECT

The King III Code of Corporate Governance has become effective in South Africa.  In a change from the King II Code promulgated in 2009, King III says that it applies to “all entities regardless of the manner and form of incorporation or establishment and whether in the public, private sectors or non-profit sectors.”  According to the drafters, the principles contained in the report have purportedly been drafted so that “every entity can apply them and, in doing so, achieve good governance.”  It is debatable whether that is true – the Code is full of rigorous requirements that are relevant to companies (and was originally intended to cover corporations regulated by the new Companies Act).  Whether it should be applicable to CSOs without some recognition of their special issues and, in many cases, small size, remains questionable.  ICCSL will be publishing an article about the King III Code in the April issue of IJCSL.

kws