Corporate governance assessed in South Africa

28 February 2010

The Institute of Directors in Southern Africa (IoDSA) has unveiled a new instrument for assessing corporate governance standards.

According to Business Day, the system is designed to measure the performance of companies in line with the principles of the King III report, which will come into effect on March 1st.

Formulated by the IoDSA, King III outlines how a South African business is expected to be run in terms of leadership, ethics, sustainable development and transparency.

"Given the enormous emphasis placed today on a company's reputation, it is of vital importance that companies demonstrate their efforts in ensuring good corporate governance," Ansie Romahlo, director of the Centre for Corporate Governance, told the publication.

She added that the assessment system will help to "establish a benchmark for corporate governance in a particular sector".

To provide an overview of their governance standards, companies will be required to answer about 300 questions relating to structures and processes.

The IoDSA has described the King III code as "the start of the journey towards better corporate governance" in South Africa.