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King IV: Report on Corporate Governance For South Africa 2016

31 Jan 2018

Financial instability, Climate Change, Influence and Impact of Social Media, Disruptive Business Models compounded by Distruptive Technolgies, and more, are part of the new reality. Not alone do they affect large organisations but they affect all of us in our homes and in the decisions we choose to make. In our view King IV leads the way in showing us what Good Corporate Citizenship Looks Like. It's of it's time as reflected in (1) calls from the world's largest institutional investors for evidence of long term sustainability, witness Blackrock's Letter to CEOs ... “We are asking that every CEO lay out for shareholders each year a strategic framework for long-term value creation. Additionally, because boards have a critical role to play in strategic planning, we believe CEOs should explicitly affirm that their boards have reviewed those plans. BlackRock’s corporate governance team, in their engagement with companies, will be looking for this framework and board review. Larry Fink, CEO February 2016'' (2) Harvard's Joseph L. Bower in his seminal piece "The Error at the Heart of Corporate Leadership'' where he concluded...''The time has come to challenge the agency based model of corporate governance. Its mantra of maximizing shareholder value is distracting companies and their leaders from the innovation, strategic renewal, and investment in the future that require their attention. History has shown that with enlightened management and sensible regulation, companies can play a useful role in helping society adapt to constant change. But that can happen only if directors and managers have sufficient discretion to take a longer, broader view of the company and its business. As long as they face the prospect of surprise attack by unaccountable ''owners'' todays business leaders have little choice but to focus on the here and now'' 

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