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The King Committee on governance issued King Report on Governance for South Africa 2009 and King Code of Governance Principles 2009, together referred to as King III on 1 September 2009. w.e.f. 1 March, 2010 Governance framework Apply or explain Where entities have applied the Code and best practice recommendations in the Report, a positive statement to this effect should be made to stakeholders. Where the board or those charged with governance decide not to apply a specific principle and/or recommendation, this should be explained fully to the entitys stakeholders.


Board is seen as the focal point for corporate governance. Responsibilities: Company must Operates ethically and with integrity, and as a responsible Corporate Citizen Considers the interests of the community within which it operates Integrates governance, strategy, risk, performance and sustainability Complies with laws and regulations Identifies and manages risks Employs structures and processes to ensure the integrity of its integrated reporting Frequency: The board should meet regularly, at least once a quarter if not more frequently as circumstances require. Unitary board structure: Comprising executive, non-executive and independent non-executive members. Majority: Non-executives, of whom the majority should be independent. Chairman: Independent non-executive director and should not be CEO Formal election and induction process for new Board members, ongoing director development, and emphasizes the importance of effective Board performance. The Boards of all companies establish audit, risk, remuneration and nominations committees, and be assisted by a competent company secretary

King III adopts a wide approach to the audit committees responsibility for financial risk and reporting to include: Financial risks and reporting Review of internal financial controls Fraud risks and IT risks as it relates to financial reporting. Combined assurance model: At three levels, i.e. management, internal assurance providers and external assurance providers. The audit committee should ensure that a combined assurance model is applied to provide a coordinated approach to all assurance activities. The audit committee should comprise at least three members All members : Independent non-executive directors. The committee as a whole should have sufficient qualifications and experience to fulfill its duties, Should be permitted to consult with specialists or consultants after following an agreed process. The terms of reference of the audit committee should be approved by the Board.

Risk- based approach: Must provide assurance with reference to the adequacy of controls to identify risks that may impair the realization of specific goals as well as opportunities that will promote the achievement of the companys strategic goals.
As an internal assurance provider internal audit should form an integral part of the combined assurance model. Provide written assessment of internal controls and risk management to the Board, Internal financial controls to the audit committee.

Primary Responsibility of Board
The Board should monitor the whole risk management process. Board responsible for the risk management policy and the determination of the companys risk appetite and risk tolerance, Management is responsible for the design, implementation and effectiveness of risk management. Can also assign to a Risk committee: Must include executive and non-executive directors.

Correct balance: Between the interests of all its various stakeholder groupings and promote mutual respect between the company and its stakeholders.
Must encourage constructive stakeholder engagement.

All stakeholders are able to assess the economic value of the company. This entails the integration of the companys financial reporting with sustainability reporting and disclosure. The Board should ensure that the positive and negative impacts of the companys operations, as well as plans to improve the positives and eradicate the negatives, are conveyed in the integrated report: Annual Reporting Board may delegate oversight of the integrated report to an appropriate committee (either the audit committee or a sustainability committee).

Alternative dispute resolution: Inclusion of dispute resolution clauses in contracts, as well as the utilization of formalized alternative dispute resolution channels. Helps in preserving stakeholder relationships and to resolve disputes expeditiously and inexpensively.