KING CODE

PRINCIPLES
PRINCIPLE 1 - THE GOVERNING BODY SHOULD
LEAD ETHICALLY AND EFFECTIVELY

Members of the governing body should behave:

- Competence
- Accountability
- Responsibility
- Integrity
- Fairness
- Transparency
PRINCIPLE 2: THE GOVERNING BODY SHOULD GOVERN
THE ETHICS OF THE ORGANISATION IN A WAY THAT
SUPPORTS THE ESTABLISHMENT OF AN ETHICAL
CULTURE

Set tone of how ethics should be approached\

Put in place codes and policies
Ensure that employees are trained and have access to
policy
Insure implementation
Exercise appropriate oversite
PRINCIPLE 3: THE GOVERNING BODY SHOULD
ENSURE THAT THE ORGANISATION IS AND IS SEEN TO
BE A RESPONSIBLE CORPORATE CITIZEN

 GB to take responsibility for setting the tone

 GB ensure that core purpose, values and strategy are
congruent
Monitor output
PRINCIPLE 4

• The governing body should appreciate that the

organisation's core purpose, its risks and opportunities,
strategy, business model, performance and sustainable
development are all inseparable elements of the value
creation process.
PRINCIPLE 4

• The organisation's short, medium and long-term strategy as

formulated and developed by management should be approved by
the governing body
• timelines and parameters should be determined determine
• GB approves the policies and operational plans developed by
management to give effect to the approved strategy
• Oversee and assess negative effects of strategy
PRINCIPLE 5 - THE GOVERNING BODY SHOULD ENSURE
THAT REPORTS ISSUED BY THE ORGANISATION ENABLE
STAKEHOLDERS TO MAKE INFORMED ASSESSMENTS
OF THE ORGANISATION’S PERFORMANCE, AND ITS
SHORT, MEDIUM AND LONG-TERM PROSPECTS.
GB set direction for how reporting should be approached and conducted
Approve management’s selection of reporting frameworks
Oversee compliance of reports with legal and regulatory requiments
and;
Reports useful to stakeholders
GB to approve materiality
GB ensure integrity of external reports
PRINCIPLE 6: THE GOVERNING BODY SHOULD SERVE AS
THE FOCAL POINT AND CUSTODIAN OF CORPORATE
GOVERNANCE IN THE ORGANISATION
GB to exercise leadership by:
Setting strategic direction
Approving policies and planning to give life to strategy
 Ensuring accountability
Approve various protocols for its members
PRINCIPLE 7: THE GOVERNING BODY SHOULD COMPRISE THE APPROPRIATE
BALANCE OF KNOWLEDGE, SKILLS, EXPERIENCE, DIVERSITY AND
INDEPENDENCE FOR IT TO DISCHARGE ITS GOVERNANCE ROLE AND
RESPONSIBILITIES OBJECTIVELY AND EFFECTIVELY.

• Factors to consider when determining the appropriate number of members for the
governing body:
• Mix of skills, experience and knowledge needed
• Appropriate mix of executive, non-executive and independent members
• Numbers needed to serve on committees
• Quorum requirements
• Regulatory requirements
• Diversity targets
PRINCIPLE 7: THE GOVERNING BODY SHOULD COMPRISE THE APPROPRIATE
BALANCE OF KNOWLEDGE, SKILLS, EXPERIENCE, DIVERSITY AND
INDEPENDENCE FOR IT TO DISCHARGE ITS GOVERNANCE ROLE AND
RESPONSIBILITIES OBJECTIVELY AND EFFECTIVELY.

• Declaration of interests annually

• Conflicts to be declared for each agenda item
• What constitutes an independent member
• Non-executive as chair
• Independent non-executive = Lead independent
CEO ROLE ON BOARD

Cannot be member of audit committee

Can be member of committee responsible for remuneration but not the
chair
 Should be a member of the committee responsible for nominations and
may also be the chair
May be a member of the committee responsible for risk governance and
may also be the chair
May be a member of the social and ethics committee but should not be
its chair
PRINCIPLE 8 - THE GOVERNING BODY SHOULD ENSURE
THAT ITS ARRANGEMENTS FOR DELEGATION WITHIN
ITS OWN STRUCTURES PROMOTE INDEPENDENT
JUDGEMENT, AND ASSIST WITH BALANCE OF POWER
AND THE EFFECTIVE DISCHARGE OF ITS DUTIES
GB to determine when is it appropriate to delegate responsibilities
to Individual/standing or adhoc committee
Where possible GB should preform duties themselves
Committee to have min 3 members
Audit committee = Consider Companies act
Audit committee maybe delegated additional responsibility
additional to Co.Act
PRINCIPLE 8…….AUDIT COMMITTEE
CONSIDERATIONS

All members to be independent non-executive

Meet annually with internal and external audit (With no
management present)
Specific disclosure RE independence of external
Auditors
PRINCIPLE 8…….NOMINATIONS COMMITTEE
CONSIDERATIONS

• All members to be non-executive and majority

independent
PRINCIPLE 8…….RISK COMMITTEE
CONSIDERATIONS

• Executive and non-executive members to be part of the

committee
• Majority to be independent
PRINCIPLE 8…….RISK COMMITTEE
CONSIDERATIONS

All members must be non-executive

Majority should be independent
PRINCIPLE 8…….SOCIAL AND ETHICS
COMMITTEE CONSIDERATIONS

Statutory required for certain entities

• Executive and non-executive members to be part of the
committee
• Majority to be independent
PRINCIPLE 9: THE GB SHOULD ENSURE THAT THE EVALUATION OF ITS OWN
PERFORMANCE , ITS COMMITTEES, ITS CHAIR AND ITS INDIVIDUAL MEMBERS,
SUPPORT CONTINUED IMPROVEMENT IN ITS PERFORMANCE AND EFFECTIVENESS

Lead Independent member to lead evaluation

A formal process needs to be followed for
evaluation (min. every 2 years)
PRINCIPLE 10: THE GOVERNING BODY SHOULD ENSURE THAT THE
APPOINTMENT OF, AND DELEGATION TO, MANAGEMENT CONTRIBUTE TO
ROLE CLARITY AND THE EFFECTIVE EXERCISE OF AUTHORITY AND
RESPONSIBILITY

GB to appoint CEO

CEO accountable to GB
CEO to attend remuneration, Nominations only by invitation
GB to ensure succession planning for GB
GB to evaluate CEO performance against agreed measures
GB to have access to professional and independent guidance on
Corporate gorv + Legal responsibilities
PRINCIPLE 11: THE GOVERNING BODY SHOULD GOVERN RISK IN A
WAY THAT SUPPORTS THE ORGANISATION IN SETTING AND
ACHIEVING ITS STRATEGIC OBJECTIVES

Govern risk in a way that allows for achievement of strategic

objectives
Consider relevant risks when making decisions
GB Agree on risk appetite & Tolerable risk
GB have ongoing oversight of risk
Consider receiving independent assessment of risk
Disclosure disclosure disclosure!
PRINCIPLE 12 - THE GOVERNING BODY SHOULD GOVERN TECHNOLOGY AND
INFORMATION IN A WAY THAT SUPPORTS THE ORGANISATION SETTING AND
ACHIEVING ITS STRATEGIC OBJECTIVES

Governing body to:

 Set direction
 Approve policy
 Delegate to management to implement good tech & info management
 Oversight
 Obtain Independence assurance where appropriate
PRINCIPLE 13: THE GOVERNING BODY SHOULD GOVERN COMPLIANCE WITH APPLICABLE
LAWS AND ADOPTED, NON-BINDING RULES, CODES AND STANDARDS IN A WAY THAT
SUPPORTS THE ORGANISATION BEING ETHICAL AND A GOOD CORPORATE CITIZEN

Governing body to:

 Set direction
 Approve policy
 Delegate to management to implement good compliance management
 Oversight
 Obtain Independence assurance where appropriate
PRINCIPLE 14: THE GOVERNING BODY SHOULD ENSURE THAT THE ORGANISATION
REMUNERATES FAIRLY, RESPONSIBLY AND TRANSPARENTLY SO AS TO PROMOTE THE
ACHIEVEMENT OF STRATEGIC OBJECTIVES AND POSITIVE OUTCOMES IN THE
SHORT, MEDIUM AND LONG TERM

 GB to assume responsibility for governance remuneration by setting direction on how

remuneration should be approached
 GB should approve remuneration policy:
• Executives needs to be fair in terms of overall remuneration of employees in the
organisation.
• Use integrated thinking In formulating performance measures
• Shareholders to vote on the remuneration report
PRINCIPLE 14 .……

 Voting on remuneration report

• Non-binding Shareholder’s vote
• In the case of =+25% dissent on the report, policy should state what steps management
will take
• Measures should provide for steps to be taken in good faith eg engagement process to
determine reason for dissent, addressing legitimate concerns and reasonable objections
PRINCIPLE 15: THE GOVERNING BODY SHOULD ENSURE THAT ASSURANCE
SERVICES AND FUNCTIONS ENABLE AN EFFECTIVE CONTROL ENVIRONMENT,
AND THAT THESE SUPPORT THE INTEGRITY OF INFORMATION FOR INTERNAL
DECISION-MAKING AND OF THE ORGANISATION’S EXTERNAL REPORTS

 GB to take responsibility for assurance by setting direction concerning arrangements for assurance functions
and services
 A combined assurance model should be applied

– Assurance from:

• Line functions that own and manage risk

• Specialist functions that facilitate and oversee risk management and compliance
• Internal auditors and fraud examiners
• External auditors
• Other external assurance providers
• Regulatory inspectors
PRINCIPLE 15…….

GB to:
• Delegate oversight over internal audit to audit committee
• Approve internal audit charter
• Esnure independence of CAE
• Approve appointment of CAE
CAE to have access to audit committee
CAE reports to chair of Audit committee
PRINCIPLE 16: IN THE EXECUTION OF ITS GOVERNANCE ROLE AND RESPONSIBILITIES THE GOVERNING
BODY SHOULD ADOPT A STAKEHOLDER-INCLUSIVE APPROACH THAT BALANCES THE NEEDS, INTERESTS AND
EXPECTATIONS OF MATERIAL STAKEHOLDERS IN THE BEST INTERESTS OF THE ORGANISATION OVER TIME

Governing body to:

 Set direction
 Approve policy
 Delegate to management to implement good stakeholder management
 Oversight
PRINCIPLE 15: THE GOVERNING BODY OF AN INSTITUTIONAL INVESTOR
ORGANISATION SHOULD ENSURE THAT RESPONSIBLE INVESTMENT IS
PRACTICED BY THE ORGANISATION TO PROMOTE THE GOOD GOVERNANCE
AND THE CREATION OF VALUE BY THE COMPANIES IN WHICH IT INVESTS.

• Advocates for responsible investing especially for funds