JOHANNESBURG – SOUTH AFRICAN standards of corporate governance had to be
improved so as to attract more investment which was vital to
economic growth, Judge Mervyn King said when he released his
long-anticipated second report ”King II”.
Launching the report in Sandton, King, the drafting committee’s
chairman, said good corporate governance made good business sense
and South African business and the government had to improve
standards.
King said capital was a scarce resource that flowed across
borders ”at the click of a mouse”.
Investment decisions were made on the basis of information
coming out of companies. People were prepared to pay more for
shares in companies that were well run, he said.
Effective control of companies in the late 20th century was in
the hands of management and not in the hands of the actual owners.
This was no longer acceptable, he said.
The King II report moved beyond the largely financial focus of
the King I report, released in 1994, by shifting the focus of
corporate governance to ”sustainable growth”.
King defined sustainable growth as that which met the needs of
the present but without compromising the ability of future
generations to meet their own needs. Development which met this
definition could be considered sustainable.
In line with global trends the updated report introduces the
concept of the ”triple bottom line” which embraces financial as
well as economic, social, health and environment issues. – Sapa