Principle 3 of the King IV™ Report on Corporate Governance for South Africa™ prescribes that the governing board should ensure that an organisation be a responsible corporate citizen.
Fostering responsible corporate citizenship
King IV™ prescribes several recommended practices in order to foster responsible corporate citizenship — these include:
Recommending who is responsible for corporate citizenship, and how corporate citizenship it is to be managed by the organisation;
Ensuring that the organisation’s responsible corporate citizenship efforts fall in line with the Constitution of South Africa (including the Bill of Rights), the law, leading standards and adherence to its own codes of conduct and policies;
Oversight of the organisation’s core purpose and values;
Oversight of the organisation’s strategy and conduct, thereby ensuring that these are congruent with being a good corporate citizen;
Oversight and regular monitoring of the outcomes of an organisation’s activities and outputs as they relate to the organisation’s responsible corporate citizenship status.
Measured performance standards
King IV™ recommends that business activities and outputs be performed against measures and targets that have been agreed upon by management in the following areas:
The workplace: including employment equity, fair remuneration, safety, health and dignity of employees;
The economy: including economic transformation, prevention, detection, response to fraud, corruption and a transparent, responsible tax policy;
Society: including public health and safety, consume protection, community development and the protection of human rights; and
The environment: including responsibilities in relevant to pollution, waste disposal and the protection of biodiversity.
Be sure to be on the lookout for further Kilgetty articles on King IV™ as we continue to discuss many of its principles which will serve well to equip your organisation with the practical implementation of effective corporate governance standards.