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Ethics of
The ethics of governance and governance and
governance of ethics in the governance of
ethics
King Reports
Gedeon Josua Rossouw 187
The Ethics Institute, Pretoria, South Africa
Received 4 October 2019
Revised 11 November 2019
Accepted 11 November 2019
Abstract
Purpose – The purpose of this paper is to explore the prominence and positioning of ethics in the four
editions of the King Report on corporate governance for South Africa that were published since 1994. It tells a
tale of how certain ethics aspects remained fairly constant over the four editions of the King Report on
corporate governance for South Africa (King I in 1994; King II in 2002; King III in 2009; King IV in 2016),
whilst other ethics aspects evolved quite substantially over the four editions.
Design/methodology/approach – In this paper, a conceptual distinction between “Ethics of
Governance” and “Governance of Ethics” will be introduced, which will then be used to analyse the ethics
dimensions of the four King reports.
Findings – It will be demonstrated that there is continuity across the four editions of the King Report as far
as the Ethics of Governance is concerned.
Originality/value – With regards to the Governance of Ethics, there has been a quite drastic evolution in
both the prominence and positioning of ethics since the publication of the first King Report in 1994.
Keywords Ethics, Business ethics, Organisational ethics, Ethics of governance,
Governance of ethics, Corporate governance, Ethics standards, Ethics management
Paper type Viewpoint

Introduction
The prominence and positioning of ethics in the four editions of the King Report on
Corporate Governance for South Africa that were published since 1994 is well worth
exploring. It tells a tale of how certain ethics aspects remained fairly constant over the four
editions of the King Report on Corporate Governance for South Africa (King I in 1994;
King II in 2002; King III in 2009; King IV in 2016), whilst other ethics aspects evolved quite
substantially over the four editions. In this article, a conceptual distinction between “Ethics
of Governance” and “Governance of Ethics” will be introduced, which will then be used to
analyse the ethics dimensions of the four King reports. It will be demonstrated that there is
continuity across the four editions of the King Report as far as the Ethics of Governance
dimension of the reports is concerned. However, with regards to the Governance of Ethics,
there has been a quite drastic evolution in both the prominence and positioning of ethics
since the publication of the first King Report in 1994.

The ethics of governance and governance of ethics

The Ethics of Governance revolves around the question: “In whose interest should a
corporation be governed?” Donaldson and Walsh (2015) indicate that there are two schools Journal of Global Responsibility
of thought in this regard. The one school of thought states that corporations should be Vol. 11 No. 2, 2020
pp. 187-196
regarded as property (2015:184), and should thus be governed in the interest of the owners of © Emerald Publishing Limited
2041-2568
the property. Governance regimes that are premised on this approach is thus underpinned DOI 10.1108/JGR-10-2019-0088
JGR by a share-owner orientated ethic, which is closely aligned with agency theory (Jensen and
11,2 Meckling, 1976) that expect governance and management structures to serve the best
interest of shareholders. This kind of shareholder ethics was classically formulated by
Milton Friedman in his famous 1970 New York Times article with the provocative title: “The
Social Responsibility of Business is to increase its Profits”.
The other school of thought, according to Donaldson and Walsh (2015, p. 184), states that
188 a corporation should be regarded as an entity in its own right, and thus should be governed
and managed in the best interest of the entity (corporation) itself. The ethic that underpins
the corporation-as-entity approach is much closer aligned to a stakeholder-orientated ethic,
as classically formulated by Freeman (1984) in his 1984 book Strategic Management: A
Stakeholder Approach. The corporation-as-entity approach is premised on the assumption
that the corporation is a nexus of various stakeholder interests, and that the corporation can
only survive and sustain itself over time if all stakeholder interests are recognised and
respected.
The Ethics of Governance dimension of corporate governance reports or regimes are not
always explicitly articulated. This dimension is often silently assumed without finding
explicit expression in the stipulations, principles and practices of all corporate governance
dispensations. Thus, the absence of an explicit articulation of the Ethics of Governance of a
specific governance report or regime is no indication that there is no such dimension. It is
always there. It just needs to be brought to the surface in cases where it silently lurks below
the surface of a specific governance dispensation.
In contrast to the Ethics of Governance, the Governance of Ethics focuses on the role and
responsibilities of governing bodies for the ethical conduct and decision-making of
governing bodies themselves, but also for the organisations that they govern. This
governance of ethics role and responsibility would typically entail that the governing body
exercises oversight of the ethical conduct and decision-making of the governing body and
the organisation that it governs, that it approves ethical standards in the form of codes or
policies, and that it provides strategic direction for the ethical conduct and culture of the
organisation.
The governance of ethics responsibility of governing bodies has both an internal and an
external dimension. The internal dimension focuses on how persons are expected to conduct
themselves as members of the governing body or as employees of the organisation. This
internal dimension often extends to external parties that are contracted by the organisation,
such as suppliers, distributors, or agents. The external dimension, in contrast, focuses on the
organisation’s role and responsibilities with regard to the social, economic and natural
environment within which the organisation operates. The governance of this external ethical
responsibility of organisations focuses on matters such as corporate social responsibility or
corporate citizenship.
In contrast to the Ethics of Governance that might not always be explicitly articulated,
the Governance of Ethics is always explicitly articulated in the stipulations, principles or
practices of corporate governance codes or standards.
The above distinction between the Ethics of Governance and Governance of Ethics will be
used in the remainder of the article to analyse and evaluate the ethics dimensions of the four
King Reports.

The Ethics of Governance in the King Reports

There is a clear continuity across the four versions of the King Report when it comes to the
ethics of governance. King I (1994) laid the foundations for the ethics of governance, by
clearly opting for an inclusive stakeholder approach where directors are expected to act in
the best interest of the company. In terms of the distinction made by Donaldson and Walsh Ethics of
(2015, p. 184) that was introduced above, the King Committee since its inception in 1992 took governance and
the company-as-entity approach, in which directors act in the best interest of the entity by
considering the interests of all its material stakeholders. This approach is quite clear when
governance of
King I states that, “it is the primary duty of the board to act honestly in the best interest of ethics
the corporation” (1994:1). That the best interest of the company is intimately tied up with the
best interest of the company’s stakeholders is demonstrated when King I continues to state
that: 189
Modern corporations can be described as a link where the interests of the mutual rights and
interests of various stakeholders are brought together, for example, shareholders, managers,
workers, customers, suppliers, and so forth. In their own interests these different groups should
co-operate to further the well-being of the corporations to which they are tied (1994:2).
The implication of this inclusive stakeholder approach is that the company is expected to
report to all its stakeholders on matters such as employment matters, environmental
matters, social responsibility, customer interest matters, and supplier interest matters
(1994:17).
The King I approach to the ethics of governance is premised on the ethical obligation as
articulated in the well-known golden rule of ethics, that expects one to do good unto others,
as you expect others to do good unto yourself. This golden rule approach of King I is
illustrated when the report states that: the company should do unto others as the company
would want to have done unto itself” (1994:24). Flowing from this moral obligation the
report emphasises that the relation between the company and its stakeholders should be
characterised by “honesty, openness and fairness” (1994:24).
The decision to embark on a stakeholder inclusive ethic of corporate governance should
most probably be seen as a direct response to the situation in which South Africa found
itself at the time when the King I Report was prepared (1992-1994), which was the time of the
transition from the old Apartheid system to the new democratic system that was introduced
by the first democratic elections in 1994. At that time, South African corporations stood
accused of collaborating with, and thus sustaining the old Apartheid order. The African
National Congress (ANC) lead by Nelson Mandela was bent on laying this dispensation to
rest, and the official ANC policy at the time was one of socialism and nationalisation of
business. In this context, it was of cardinal importance that corporate South Africa should
be seen as willing to change its stance and willing to govern itself in a manner that would
not harm the interests of its stakeholders.
In the King Report on Corporate Governance for South Africa – 2002 (King II), the
commitment of the King Committee to an inclusive stakeholder approach in the best interest
of the company is once more reinforced. The report is, however, more nuanced than King I in
articulating commitments to stakeholders. King II makes it clear that directors are
accountable only to the company, but responsible to all other stakeholders. It rejects the
notion of the boards being accountable to stakeholders, by stating:
The stakeholder concept of being accountable to all stakeholders must be rejected for the simple
reason that to ask boards to be accountable to everyone would result in their being accountable to
no one (2002:5).
In terms of Donaldson and Walsh’s (2015, p. 184) distinction between the “company-as-
property” and the “company-as-entity” King II follows in the steps of King I by once more
affirming its choice for the “company-as-entity”. The report explicitly rejects the notion of
the company as the property of shareowners. King II rejects the notion that the company
belongs to shareowners, and that it consequently should be governed in the best interest
JGR of shareowners, by arguing that “on incorporation the company becomes a separate
11,2 persona in law and no person whether natural or juristic can be owned” (2002:9). King II
thus implies that the notion of shareowners owning a juristic person, constitutes a form of
modern-day slavery. Instead, it calls on directors to find a balance between the mutual
best interests of shareholders and stakeholders in the long-term best interest of the
company.
190 Once more as a consequence of the stakeholder approach to corporate governance, the
responsibility of the board to report to stakeholders is emphasised. Specific mention is made
of reporting to stakeholders not only on financial matters but also on non-financial and
sustainability matters. In this regard, King II laments the lack of a “universal standard or
language” (2002:15) for reporting on these matters.
Though there is clearly no shift from King I to King II in the commitment to a
stakeholder inclusive approach, the justification of this approach is very different from
King I, which premised the justification on the golden rule of ethics. In the case of King II,
three different justifications for a stakeholder inclusive approach are offered.
The first justification for a stakeholder inclusive approach is based on the modern-day
fact that corporations ultimately receive their social licence to operate from their
stakeholders. Corporations exist by the grace of the implicit approval of stakeholders, which
can be lost if corporations harm the interest of stakeholders.
A second complementary justification is found in the role that information technology
plays in contemporary society. King II reminds corporations that they are constantly in the
gaze of their stakeholders, and should thus ensure that they are not seen as harming the
interest of stakeholders. In this regard, King II states that, “in the age of electronic
information and activism, no company can escape the adverse consequences of poor
governance” (2002:8).
The third justification arises from the conviction that any corporate governance regime
should be attuned to the values of the society in which it operates, which in the case of South
Africa is the African worldview and culture, that also is often referred to as “Ubuntu”. This
African worldview consists of traits like consensus rather than dissension, humility and
helpfulness, non-discrimination, co-existence with other people, and trust in the fairness of
all human beings (cf. 2002:18). Taken together, these traits of the African worldview support
a stakeholder-inclusive ethic of governance, and render an exclusive shareholder ethic
inappropriate.
In the King Report on Corporate Governance for South Africa 2009 (King III), the
commitment to an inclusive stakeholder ethic is maintained. It is however interesting to note
that in earlier drafts of this report, there was an attempt to shift the orientation of the
King III report from a stakeholder inclusive approach to a shareholder-enlightened
approach. This attempt was, however, effectively and explicitly rejected in the final version
of King III. It is worth quoting the stance of King III in this regard at length:
It is recognised that in what is referred to as the ‘enlightened shareholder’ model as well as the
‘stakeholder inclusive’ model of corporate governance, the board of directors should also consider
the legitimate interests and expectations of stakeholders other than shareholders. The way in
which the legitimate interests and expectations of stakeholders are being treated in the two
approaches is, however, very different. In the ‘enlightened shareholder’ approach the legitimate
interests and expectations of stakeholders only have an instrumental value. Stakeholders are only
considered in as far as it would be in the interest of shareholders to do so. In the case of the
“stakeholder inclusive” approach, the board of directors considers the legitimate interests and
expectations of stakeholders on the basis that it is in the best interest of the company, and not
merely as an instrument to serve the interest of the shareholder (2009:13).
If some doubt still existed about whether shareholders occupy a position of preference over Ethics of
other stakeholders, such doubt was also dismissed when the report states that, “The governance and
shareholder, on the premise of this approach, does not have a predetermined place of
precedence over other stakeholders” (2009:13).
governance of
Apparently, King III found it no longer necessary to spend much time or attention to its ethics
justification of a stakeholder inclusive approach – probably because this approach was now
firmly established. The report only in passing refers to “ubuntu” (2009:10) as justification for
this approach. What is, however, new in King III is that for the first time, sustainability, and 191
the need for social transformation in South Africa were added as additional grounds of
justification for a stakeholder inclusive ethic of corporate governance (cf.2009:14).
In line with its two predecessor reports, King III also emphasised the need to report to
stakeholders on all matters relevant to the sustainability of the company in order to
engender the trust of stakeholders, and to ensure the legitimacy of the company. By
insisting that the sustainability report should be integrated with the financial report of the
company, King III prepared the path for “integrated reporting” that became one of the most
prominent features of the fourth King Report in 2016.
In the Report on Corporate Governance for South Africa 2016 (King IV), “stakeholder
inclusivity” is included in the “Glossary of Terms” that are central to the report, and is
defined as:
An approach in which the governing body takes into account the legitimate and reasonable needs,
interests and expectations of all material stakeholders in the execution of its duties in the best
interest of the organisation over time.
Thus aligning it with its three predecessor reports (2016:17). Like King III, it once more
emphasises that “the governing body gives parity to all sources of value creation” and that
“this inclusive, stakeholder-centric approach [. . .] stands in contrast with a shareholder-
centric approach” (2016:17).
In addition, in the section on the “Fundamental Concepts” underpinning the King IV
philosophy, “stakeholder inclusivity” is once more recognised as one of the key concepts on
which the report is premised. In this regard, King IV states that: “the organisation’s ability
to create value for itself, depends on its ability to create value for others” (2016:23).
In doing so, King IV aligns itself with the King III justification for a stakeholder inclusive
ethic, by once more linking the stakeholder-centric approach to the sustainability of the
organisation. Furthermore, like in King II and King III, King IV once more appeals to the
African concept of “Ubuntu or Botho” to provide a justification for stakeholder inclusivity
(2016:24). With reference to these concepts, King IV says that, “in line with this ethos,
organisations should also take responsibility for the environmental outcomes of their
activities and outputs, as those affect society as a whole” (2016:24).
King IV, like its predecessor reports, also emphasises that a stakeholder-centric ethos
compels organisations to inform their stakeholders about the state of health of the
organisation. What is different from the previous reports is that integrated reporting is now
recommended as the most appropriate medium for communication with stakeholders.
King IV admits that the significant developments in the field of integrated reporting, and
especially the publication of International IR Framework by the International Integrated
Reporting Council (2013) provided organisations with a much more appropriate tool for
communicating with stakeholders. The IR framework uses the six-capital model to report an
organisation’s current and future prospects to its stakeholders. Each of the capitals,
however, implies certain stakeholders, thus integrated reporting also demonstrates how
organisations benefit from, but also affects their material stakeholders. It is noteworthy that
JGR whereas the International IR Framework is geared to provide the providers of financial
11,2 capital with quality information (IIRC, 2013:2), King IV clearly regards the integrated report
as a useful mechanism to report the organisation’s performance and future prospects to all
stakeholders, and not only to the providers of financial capital.
In summary, it is clear that the stakeholder-centric ethos that was first introduced in
King I prevailed throughout all the King reports that followed. The only changes that
192 occurred over time relate to how this stakeholder-centric ethos was justified in the various
King reports, and also to how this approach compels organisations to report to their
stakeholders.

The Governance of Ethics in the King Reports

We will now turn to how the four editions of the King report dealt with the governance of
ethics. In this respect, there is a steady and substantial progression since the publication of
King I.
We find references to ethics throughout King I, but the chapter that deals specifically
with the governance of ethics is the last chapter of the report that deals with a specific
dimension of corporate governance, before the final chapters that concludes the report. The
placing of the chapter right at the end of the report might be an indication of the relative (un)
importance of the governance of ethics at the time. In “The Code of Corporate Practices and
Conduct” (1994:31-35) that lays down the corporate governance guidelines emanating from
the report, “Ethics” is once more the last topic that is discussed.
The guidance given on the governance of ethics in this Code centres mainly around the
role of the board to commit the company to ethical standards of behaviour and to capture
those ethical standards in a code of ethics that is sufficiently detailed to provide guidance to
employees. It also emphasised that the board and the CEO should also commit themselves to
the code of ethics.
Although it is mentioned in the chapter on “Ethics” that “corporations need to be decent
citizens” (1994:26) and in the chapter on “Stakeholder Links” that “companies should be
encouraged to view themselves as residents in a particular area, [and] to act in a spirit of
good neighbourliness” (1994:23) the notion of corporate citizenship did not find its way into
“The Code of Corporate Practices and Conduct”.
A unique feature of King I is that a code of ethics is attached to the report with the title:
“Code of Ethics for Enterprises and All who deal with Enterprises” (1994:58-65). This rather
lengthy document, consisting of eight chapters, utilises a stakeholder approach to outline
the ethical responsibilities of both contractual and non-contractual stakeholders of
companies. It thus assumes that there should be an ethical ecology in which all who are
affected by business, as well as all who can affect business have specific ethical
responsibilities to the company.
There is some ambiguity around the status and intention of this “Code of Ethics for
Enterprises and All who deal with Enterprises” that was attached to King I. While one of the
recommendations of the Report, is that, “Every affected corporation should have its own
Code of Ethics” (1994:30), the question arises as to what the purpose of the attached Code of
Ethics was.
In practice, it seems that companies in general did not follow the recommendation of
King I that they should develop their own codes of ethics. Instead, they opted to just
subscribe to the “Code of Ethics for Enterprises and All who deal with Enterprises” as a
substitute for developing their own codes of ethics.
In a study on codes of ethics that was conducted by Young (1995) in 1995, it was found
that only 9 of the 100 companies included in the Sunday Times Top 100 survey, had a code
of ethics. In another 32 companies, references to ethics were found in governance-related Ethics of
documents of these companies. For the remaining 61 companies, no indications of codes of governance and
ethics or even a reference to ethics were found. Based on these findings, Young concluded
that the codes of ethics seemed to have very little importance for, or impact on the actual
governance of
conduct of companies (1995:121). ethics
The positioning of the governance of ethics in King II was much more prominent
compared to King I, and also much more detailed. The sub-chapter on “Ethical Practices and
Organisational Integrity” (2002:108-113) formed part of Section 4 of the Report that dealt 193
with “Integrated Sustainability Reporting”. It is symbolically important that ethics was no
longer introduced as a last consideration – as was the case in King I – but was now
positioned more or less in the middle of the King II Report.
King II, like King I, emphasised the importance of formalising a company’s ethical
standards in a code of ethics or similar formal document. A very significant departure from
the approach taken by King I was that King II no longer provided a model code of ethics as
an appendix to the Report. Instead, companies were encouraged to develop their own codes
of ethics. To assist companies in this regard, the King II Report included an appendix that
dealt with “Key decisions in developing a code of ethics” (2002:239-245).
Another important development in King II was the emphasis that a code of ethics on its
own was not sufficient for changing ethical conduct and culture in a company. A code of
ethics is but one element in a more comprehensive formal ethics programme that should
have “both behavioural and structural aspects” (2002:108). The structural measures that
were recommended in this regard, included ethics risk assessments, systems for monitoring
of compliance to ethical standards, the provision of safe reporting (speak-up) channels,
performance and remuneration systems, integrity assessment in selection processes, ethics
induction and training, internal audit of ethics compliance, reporting to stakeholders on the
state of ethics, and independent verification of compliance with ethical standards (cf.
2002:109-110).
The specific recommendations of the King II Report regarding organisational integrity
that eventually found their way into the King II Code of Corporate Governance was largely
based on the Federal Sentencing Guidelines that was adopted in the United States, and that
also emphasised the structural measures of a comprehensive organisational ethics
programme as discussed above.
The evolution of the governance of ethics from King I to King II was thus quite
significant. There was by now a clear realisation that the governance of ethics entails much
more than the development and adoption of a formal code of ethics. The emphasis in King II
shifted instead to how ethical standards articulated in a code of ethics should be
institutionalised through formal processes and structures.
With King III, the governance of ethics became even more prominent, with the chapter on
“Ethical leadership and corporate citizenship” (2009: 19-27) now being positioned as the very
first chapter of the King III Code of Corporate Governance.
King III, unlike its predecessors that only made governance recommendations, for the
first time introduced governance principles. The first three of the 68 principles in King III
dealt specifically and explicitly with ethics.
The first principle in King III focussed on the ethical dimension of leadership, and stated
that “The board should provide effective leadership based on an ethical foundation”
(2009:20), thus echoing a sentiment that has been first introduced in King I, namely, that
corporate governance is essentially about “enterprise with integrity”.
In the explanation that follows on the introduction of the first principle, a very intimate
link between ethics and governance is established, when King III stated that, “Ethics (or
JGR integrity) is the foundation of, and reason for, corporate governance. [. . .] Corporate
11,2 governance is, in essence, a company’s practical expression of ethical standards” (2009:21).
Under this principle, four ethical values that directors should adhere to in the execution of
their duties are identified as responsibility, accountability, fairness and transparency.
Whereas the first principle focussed on the ethics and integrity of board members, the
second principle focussed on the board responsibility to ensure that the company acts in a
194 responsible manner in the society in which it operates. The second principle of King III
stated, “The board should ensure that the company is and is seen to be a responsible
corporate citizen” (2009:22). Although the notion of corporate citizenship was mentioned in
both King I and King II, King III was the first of the King Reports to elevate corporate
citizenship to the status of a governance principle.
Under this principle, it is emphasised that companies are always affected by the triple
context of the economy, society, and natural environment in which they operate, but that
companies through their operations also impact the very same triple context, which make
them co-responsible for the future of this triple context. This moral obligation is illustrated
when King III stated that: “Responsible corporate citizenship implies an ethical relationship
of responsibility between the company and the society in which it operates” (2009:22).
Corporate citizenship should not be an empty slogan but should consist of “tangible
reportable programmes and results” (2009:24) according to King III. The board thus have a
strategic, policy and oversight role with regard to the company’s performance as a
responsible citizen.
The third principle of King III focussed on the obligation of directors to provide strategy
and oversight of a company’s organisational ethics. This principle state that “The board
should ensure that the company’s ethics are managed effectively” (2009:24). The guidance
given under this principle basically follows in the steps of what King II already proposed
with regard to structures and processes that should be institutionalised as part of a formal
ethics programme in a company. Key elements of such an organisational ethics programme
are compiling an ethics risk and opportunity profile, ensuring that ethical standards are
formalised in a code of conduct, taking steps to ensure that ethical standards are integrated
in the company, and finally that there is assessment, monitoring, reporting and disclosure of
organisational ethics by the board.
In a study conducted in 2011 on business ethics in South Africa by the London-based
Institute of Business Ethics it was found that “Every company listed on the Johannesburg
Stock Exchange (JSE) has a code of ethics and has some form of ethics management
programme in place as a result of the requirement to adhere to King III” (Irwin, 2011:13).
This is an indication that the insistence on companies having their own codes of conduct, as
well as formal ethics programmes, as recommended by both King II and King III, was
gaining traction in corporate South Africa.
King IV followed in the steps of King III by once more positioning ethics as the first part
of the King IV Code on Corporate Governance. In comparison with King III in which 3 out of
the 68 principles focussed explicitly on ethics, King IV had only 16 generic principles, but
still three out of the 16 principles dealt with ethics. This implies that a substantially larger
portion of the King IV Code was dedicated to ethics compared to King III.
King IV is also similar to King III in terms of the focus of the first three principles on
ethics, in the sense that the three principles once more focussed on the ethics of the members
of the governing body, on organisational ethics, and finally on corporate citizenship. There
is, however, with regard to each of these three principles, some very significant new
developments in King IV.
 The first principle that focuses on the ethics of the governing body, states that, “The Ethics of
governing body should lead ethically and effectively” (2016:43). The big difference with governance and
King III is that whereas King III introduced the ethical values of responsibility,
accountability, fairness and transparency that directors should adhere to, King IV used the
governance of
same four terms, but called them “characteristics” instead. King IV also added another two ethics
characteristics to the list, namely, integrity and competence. By referring to these six
characteristics, King IV displays a distinct virtue ethics stance, in the sense that it implies
that the six characteristics should become traits of character of members of governing body. 195
That King IV thus introduces the notion of on-going character formation is clear when it
states that “Members of the governing body should individually and collectively cultivate
the following characteristics and exhibit them in their conduct (author’s emphasis) (2016:43).
Also with regard to the second principle of King IV that focuses on the governance of
organisational ethics, there is on the one side continuity with King III in the sense that the
focus on a structured ethics programme that should be governed is maintained. The big
difference with King III, however, is that the focus now shifted to the outcome that the ethics
programme should achieve. The second principle of King IV states that “The governing
body should govern the ethics of the organisation in a way that supports the establishment
of an ethical culture: (2016:44). By focussing on the cultivation of an ethical culture as the
ultimate outcome that an ethics programme should achieve, King IV not only introduced a
stretching target, but also signalled that mere ethics compliance programmes are no longer
considered adequate.
The third principle of King IV appears on face value very similar to the King III principle
on responsible corporate citizenship, when the King IV principle states that “The governing
body should ensure that the organisation is and is seen to be a responsible corporate citizen”
(2016:45). The big difference with King III centres around the fact that after the publication of
King III, a new companies act (Companies Act, 2008; Companies Act Regulations, 2011) came
into effect in 2011 that made it compulsory for all listed companies, state-owned companies,
and so-called public interest companies to have a Social and Ethics Sub-committee of the
Board. The mandate of the Social and Ethics Committee is to monitor that companies comply
with relevant legislation and international best practice with regard to their performance in
the triple context of the economy, society and natural environment (cf. Rossouw, 2018:15). In
principle 3 of King IV the focus of the principle is now directly aligned with the mandate of
the Social and Ethics Committee, which entrench the principle much more firmly in the
mainstream corporate governance of organisations, as the governance of responsible
corporate citizenship is now a statutory requirement in at least some organisations.

Conclusion
This article traced the development of the ethics of governance and governance of ethics
over the four versions of the King Report that has been published between 1994 and 2016. It
is clear that one can speak of an on-going tradition and trajectory of development across the
four reports. The ethics of governance orientation of the four King Reports remained fairly
stable over time, with only the justification for the inclusive stakeholder ethos underpinning
the four reports becoming more nuanced over time. The governance of ethics dimension
over the four reports evolved from an initial focus on codes of ethics, through more
structured organisational ethics programmes, to ultimately a focus on the cultivation of
ethical culture in organisations. This gradual growth in sophistication of the governance of
ethics is also witnessed in the eventual focus on three distinct dimensions of the governance
of ethics, namely, the ethics of leadership, organisational ethics and responsible corporate
citizenship.
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Further reading
Friedman, M. (1993), “The social responsibility of business is to increase its profits”, in Olen, J. and
Barry, V. (Eds), Applying Ethics, Wadsworth, Belmont, CA.
King Committee on Corporate Governance in South Africa (1994), The King Report on Corporate
Governance, IoDSA, Johannesburg.
King Committee on Corporate Governance in South Africa (2002), King Report on Corporate
Governance for South Africa – 2002, IoDSA, Johannesburg.
King Committee on Corporate Governance in South Africa (2009), “King report on governance for South
Africa 2009”, available at: https://cdn.ymaws.com/www.iodsa.co.za/resource/resmgr/king_iii/
King_Report_on_Governance_fo.pdf (accessed 29 August 2019).
King Committee on Corporate Governance in South Africa (2016), “King IV report on corporate governance
for South Africa (2016)”, available at: https://c.ymcdn.com/sites/iodsa.site-ym.com/resource/
collection/684B68A7-B768-465C-8214-E3A007F15A5A/IoDSA_King_IV_Report_-_WebVersion.pdf
(accessed 29 August 2019).

Corresponding author
Gedeon Josua Rossouw can be contacted at: deon.rossouw@tei.org.za

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