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GROUP MEMBERS slides

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Salman Khan
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We take content rights seriously. If you suspect this is your content, claim it here.
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GROUP MEMBERS

 SALMAN KHAN
 ABDULLAH KHAN
 BAKHT MUHAMMAD
 NUMAN KHAN
 AFTAB KHAN
CORPORATE GOVERNANCE IN SOUTH AFRICA:
THE INTRODUCTION OF KING III AND REPORTING PRACTICES
AT THE JSE ALT-X
South Africa has experienced a tremendous growth in its economy since its first free elections in 1994.
Politicians, however, consider the transformation of the society and more equally distributed wealth as
one of their key goals. Thus, companies often find themselves under scrutiny as regards their
contribution. A new corporate governance code (King III) will become effective in March 2010. This
reworked code now tries to enhance the reporting practices of companies as to their sustainability and
corporate social engagement and tries to link international standards of corporate governance with
African values. This paper introduces the novelties of King III and examines the current reporting
practices of 68 companies listed on the Alt-X segment of the Johannesburg Stock Exchange. The
paper discusses issues like risk, board composition and remuneration and provides valuable
insights into the structure of small cap companies in South Africa and analyses which parts are used by
companies to enhance their legitimacy.
Definition
Corporate governance describes the system by which
means companies are directed and controlled is called corporate governance . Corporate Governance Code,
King II, has been
reworked and the new code, King III, will be released
in March 2010. King III takes an interesting route and tries to balance between international developments
and African peculiarities. South Africa chose a code
of principles and practices on a „apply or explain‟
basis. Thereby, so is the explanation, it is intended to
guarantee enough freedom to the companies to
balance the cost of compliance with their imminent
business needs.
Black economic
Empowerment
Black Economic Empowerment is a policy of the South African government which aims to
facilitate broader participation in the economy by black people. A form of affirmative action, it is
intended especially to redress the inequalities created by apartheid. The purpose of BEE is to
bridge the gap between formal and substantive equality to ensure that all people in South Africa
fully enjoy the right to equality. The Broad-Based Black Economic Empowerment Act was
made into law in 2003. South African explained the policy in his State of the Nation speech in
2002. The President Thabo Mbeki the main goal of BEE is to improve the economic status of
black, colored (mixed-race), and Indian South Africans.
KEY PRINCIPLES OF THE KING III
REPORT
1) ROLE AND FUNCTION OF THE BOARD

 The Board should direct, govern and control the company.


 The Board should provide effective Corporate Governance.
 The Board is the link between the stakeholders and the company.
 The Board should exercise leadership, enterprise, integrity and judgment.
 The Board should identify and take account of the legitimate expectations of
stakeholders.
 Stakeholders should be engaged in such a manner that they have trust and confidence in the
company.
2)The Board should ensure that the
company acts and is seen to be a
responsible corporate citizen
The company should not undermine the sustainability of the social and natural environment.
 As part of corporate citizenship the company should be sustainable and should enable future
generations to meet their needs.

3)The Board should cultivate and promote


an ethical corporate culture.
Ethical conduct should be promoted.
Ethical conduct should be evident in the company’s relationship with society and the natural
environment.
Ethical standards should be involved and followed in all aspects of the company’s business.
4)The Board should consider sustainability
as a business opportunity
The business should result in value being created. This value should include the triple bottom
line, namely:
 Social performance
 Economic performance
 Environmental performance
5) The Board and its Directors should manage conflicts of interest
CORPORATE CITIZENSHIP, LEADERSHIP
INTEGRITY
AND RESPONSIBILITY
Corporate citizenship refers to a company's responsibilities toward society. The goal is to
produce higher standards of living and quality of life for the communities that surround them
and still maintain profitability for stakeholders.
“leadership Integrity is one of the fundamental principles of good corporate governance. This
means that the leaders and the management should commit to the company's core values and
mission instead of their own personal interests. Integrity is the consistency and transparency of
each leader's deeds and actions.

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