corporate goverance

• How does legislation discussed in the syllabus affect management?

  It influences how management manages the business.
• How can Corporate Governance be defined?

  As the set of rules and processes used by top management to direct and control the business.
• What does Corporate Governance provide for a business?

  A framework and control measures to look after profit and consider stakeholder interests.
• Who are considered stakeholders in a business?


  Management, shareholders, customers, suppliers, government, the community, and the environment.
• What was the purpose of the King Committee founded in 1992?


  To clarify the concept of Corporate Governance and its implementation in South Africa.
• What did King Report I recommend for companies listed on the JSE?

  Standards of conduct regarding their responsibilities towards citizens.
• What is Triple Bottom Line reporting?

  It is integrated reporting that requires management to consider all stakeholders, society, and the environment.
• How did King II, published in 2002, contribute to Corporate Governance?

  It stated seven principles of good Corporate Governance.
• What are the seven principles of good Corporate Governance according to King II?

  1. Transparency
  2. Accountability
  3. Independence
  4. Discipline
  5. Social Responsibility
  6. Fairness
  7. Responsibility of directors
• What does transparency in Corporate Governance refer to?

  Decisions being made according to a set of rules that everyone understands.
• Why is transparency a pre-condition for accountability?

  Without transparency, it is impossible to hold someone accountable for decisions made.
• What does accountability mean in a business context?

  Taking responsibility for one's actions.
• How does accountability increase stakeholder confidence?

  It assures stakeholders that responsible decisions are being made.
• What does independence in Corporate Governance mean?

  There is no conflict of interest or unfair influence from stakeholders.
• How can networking affect independence in decision-making?

  Networking may reduce independence if obligations to contacts influence decisions.
• What is the starting point of discipline in a business environment?

  Self-discipline.
• What is market discipline?

  It refers to the market punishing management for irresponsible decisions.
• What are the consequences of management acting incompetently?

  Customers may stop using the product, stakeholders may withdraw investments, and regulatory discipline may be imposed.
• What does social responsibility in Corporate Governance entail?

  Acting responsibly regarding social issues like fair salaries and exploitation of resources.
• What does fairness imply in dealing with stakeholders?

  Considering all relevant parties' interests when making decisions.
• What is the fiduciary duty of directors?

  To represent the shareholders and act in the best interest of the business.
• What are some responsibilities of directors according to the King report?


  Acting with skill and care, good faith, preventing risks, and ensuring ethical leadership.
• What is the importance of audit committees in Corporate Governance?

  To monitor finances and ensure responsible use of technology.
• When was King III released?

  On 1 September 2009.
• What does King III require from directors regarding misrepresentation?


  Directors may be liable for acting unethically.
• What is the "Apply or Explain" focus of King III?

  The board must motivate why they are not implementing King report recommendations.
• What is the role of the Business Audit committee in King III?

  To obtain an external opinion to verify sustainability in the integrated report.
• What is a key emphasis of King III regarding directors?

  On the independence of directors.
• What happens if there is a conflict between the board's decisions and the Independent Audit committee's decisions?

  The committee's decision will stand and they will be held accountable by law.
• When did King IV become effective?

  On or after 1 April 2017.
• How does King IV differ from King III regarding the application of principles?

  King IV assumes application of all principles and requires entities to explain how they are applied.
• What is the focus of Corporate Governance according to King IV?


  It should be concerned with ethical leadership, attitude, mindset, and behavior.
• What does King IV emphasize regarding remuneration?

  It receives greater prominence in line with international developments.
• What does King IV recognize as a corporate asset?

  Information in isolation of technology as part of the company’s intellectual capital.
• What is the new emphasis in King IV regarding stakeholders?

  On the roles and responsibilities of stakeholders.