MEASURED BUSINESS CONTINUITY IS GOOD GOVERNANCE

The King III report on corporate governance has been finalised and is due to be released in March this year and South African business leaders will be compelled to re-evaluate many areas of their businesses, most particularly their governance, risk and compliance operations.

Moreover, combining this with the new Companies Act 2008 which takes effect in June 2010, company executives will need to be in a position to implement changes to satisfy these new provisions in their organisations, while also finding ways to ensure their modifications have the desired impact. And while King III's predecessor, King II, was mandatory for listed companies on the JSE, King III has a significantly further reach as the code for good governance will now be applicable to all legal business entities, thereby enforcing more executives to apply a far more concerted effort toward its compliance.

Says Terry Booysen, CEO of CGF Research Institute, "Good intentions are not good enough any more when it comes to corporate governance. Executives can find themselves in serious trouble if they do not ensure their business conduct and operations meet the provisions of what is expected from the likes of King III, the new Companies Act, Competitions Act, class actions and many other legal and regulatory measures due this year, which are designed to improve the manner in which we conduct business locally and abroad. The old adage ‘you can't manage what you can't measure’ is therefore more prevalent in South African business today than ever before”.

The only way to ensure that companies meet the new governance standards is for boards to appoint directors who are equipped to deal with these additional responsibilities whilst providing them the authority to implement and oversee the changes. These leaders will need to ensure each area affected by the new laws and governance recommendations is continually up to standard.

(Source: Article courtesy CGF Research Institute (Pty) Ltd and ContinuitySA (Pty) Ltd)
 
 
 
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