King Report On Corporate Governance - King I

King I

In 1994 the first King report on corporate governance (King 1) was published, the first corporate governance code for South Africa. It established recommended standards of conduct for boards and directors of listed companies, banks, and certain state-owned enterprises. It included not only financial and regulatory aspects, but also advocated an integrated approach that involved all stakeholders.

It was applicable to all companies listed on the main board of the Johannesburg Stock Exchange, large public entities as defined by the Public Entities Act of South Africa; banks, financial and insurance companies as defined by the Financial Services Acts of South Africa; and large unlisted companies. It defined "large" as companies with shareholder equity over R50 million, but encouraged all companies to adopt the code.

The key principles from the first King report covered:

• Board of directors makeup and mandate, including the role of non-executive directors and guidance on the categories of people who should make up the non-executive directors
• Appointments to the board and guidance on the maximum term for executive directors
• Determination and disclosure of executive and non-executive director’s remuneration
• Board meeting frequency
• Balanced annual reporting
• The requirement for effective auditing
• Affirmative action programs
• The company’s code of ethics