Corporate Governance & King 3 | KPMG | ZA

Corporate Governance & King 3

Corporate Governance & King 3

The third South African report on corporate governance (King III) was released on 1 September 2009 and became effective on 1 March 2010.


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At first glance, King 3 appears to be similar to the previous King 2 report. However, there are significant differences, many of them aspirational, which will have practical implications for boards, directors, management, assurance providers and stakeholders.

South African entities will have to consider the recommended principles in King 3, state what theirs are, and explain if and why they differ from the King 3 recommendations. This softer approach to governance disclosure is more flexible, but may be open to abuse if entities fail to justify their deviations from the King 3 Report’s recommended principles. Only the sophisticated reader and those well-versed in governance will be able to discern deviations from the recommended principles in the disclosure.

Potentially, this could expose a director to liability in the event that statements of adherence to principles are made but the best practices are not followed and are not explained.

King III - Quick Reference Guide

The quick King III reference guide in this document contains a summary and extracts of the salient details. However, the reader is encouraged to consult the full King III Report and the Code of Governance Principles, now available from the Institute of Directors in Southern Africa.

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