King V - The New Era of Corporate Governance Excellence
The Institute of Directors in South Africa (IoDSA) adopted the final version of the King V Code on Corporate Governance on 31 October 2025. This update refines local governance standards and simplifies the code for easier applications, while retaining the core principles of King IV.
SCOPE AND STRUCTURE
King V applies to all organisations, including retirement funds and insurers. It is structured into four parts:
1. Foundational Concepts
2. The Code.
3. Glossary
4. Disclosure Framework
The code uses an “apply and explain” disclosure system and provides a reporting template to guide organisations.
Key Focus Areas
King V emphasises:
- Ethical leadership
- Sustainable value creation
- Risk and compliance integration
- Stakeholder inclusivity
It is outcomes-based and becomes effective on 1 January 2026, with early adoption encouraged to enhance governance and transparency.
Major Changes from King IV
• Reduction and Consolidation: Principles reduced from 17 to 13, merging related concepts for clarity.
• Language and Accessibility: Plain, jargon-free language for broader applicability.
• Independence Criteria: Strengthened rules; board members lose independence after nine years.
• Risk and Compliance Integration: Combined into a single principle for unified oversight.
• Enhanced Disclosure: Formal framework with templates under the “apply and explain” regime.
• Outcome Emphasis: Greater focus on evidence of governance effectiveness, not just process.
• Updated Governance Themes: Explicit inclusion of technology governance and removal of the separate institutional investor principle.
The 13 Principles Summarised
The governing body:
1. Leads ethically and effectively.
2. Governs ethics to promote an ethical culture and responsible corporate citizenship.
3. Aligns purpose, strategy, and business model for sustainable value.
4. Oversees external reporting for holistic stakeholder assessment.
5. Ensures balanced composition with diversity, skills, and independence (9-year tenure limit).
6. Manages delegation to committees and individuals effectively.
7. Appoints and delegates to management with clear accountability.
8. Governs risk and compliance strategically.
9. Ensures compliance with laws, codes, and standards ethically.
10. Governs data, information, and technology to support objectives.
11. Ensures fair, responsible, and transparent remuneration.
12. Promotes effective assurance and internal control for accurate reporting.
13. Adopts a stakeholder-inclusive approach for long-term interests.
In our opinion, the introduction of King V is widely regarded as a positive and timely evolution in South African corporate governance. By simplifying language and consolidating principles, it makes governance more accessible and practical, especially for smaller organisations that previously found King IV complex. The integration of technology governance and enhanced disclosure framework reflects modern business realities, ensuring boards remain accountable in a digital and data-driven environment.
The nine-year independence limit is a welcome move to strengthen board objectivity, while the outcomes-based approach aligns governance with real-world impact rather than mere compliance.
Overall, King V is expected to improve transparency, stakeholder trust, and organisational resilience, making it a highly recommended adoption for all entities.
Ready to Enhance Your Governance?
Please feel free to contact us today to explore how King V can build a more resilient and transparent organisation.
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