Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

JSE Limited : JSE and IoDSA Collaborate on corporate Governance Guidelines

02/05/2013 | 07:10am US/Eastern
Recommend:
0
JSE and IoDSA Collaborate on corporate Governance Guidelines

February 05, 2013

Johannesburg, 5 February 2013 - As stakeholder interest in the corporate governance of listed companies continues to grow, companies grappling with how to be more transparent about these practices have received guidance from two practice notes issued by the King Committee on Corporate Governance. The drafting of the practice notes has been spearheaded by the Institute of Directors in Southern Africa (IoDSA) in collaboration with the Johannesburg Stock Exchange (JSE).

Corporate governance reporting under the spotlight
King III proposes that companies should report on their application of its corporate governance principles to give stakeholders a more comprehensive picture. This disclosure allows stakeholders to understand and challenge boards on the quality of their governance. "The aspirational nature of King III should drive continuous improvement of governance practices among JSE-listed companies," says JSE Director of Issuer Regulation John Burke.

IoDSA Chief Executive, Ansie Ramalho says the practice note on disclosure on the application of King III was issued by the King Committee because the JSE and IoDSA have received several requests about how companies should approach this. Says Ramalho: "King III is adopted by companies on an "apply or explain" basis to allow for flexibility of application depending on the size, nature and complexity of the organisation." What complicates matters for listed companies is that the listings requirements stipulate that there are certain governance requirements that are mandatory, where issuers do not have the option of explaining any non-compliance. These include the need for a company to have separate CEO and Chairman, the composition of the Audit Committee and having a policy detailing the procedures for appointment to the Board," says Ramalho.

However to implement King III, listed companies need continually to consider the judicious application of each of those non-mandatory principles. The proposal in the practice note is that each company provide a register of application on its website, referenced in the annual integrated report. "The philosophy of integrated reporting is that material information should be provided that presents a holistic picture of how the company is creating value now and will continue into the future," says Prof Mervyn King, the chairman of the King Committee.

Focus on directors retiring by rotation
The second practice note addresses the corporate governance requirement for directors to retire by rotation.

The JSE Listings Requirements provide that all directors' appointments (both executive and non-executive) are subject to shareholders' approval. However like King III, the Requirements state only non-executive directors need rotate. Despite this many investors insist upon executive directors being included in the rotation and the practice note sets out the potential problems associated with this.

While there is in law no distinction between executive and non-executive directors, there are differences in their functions from a governance perspective. The executive director is an employee and office bearer of the company. The role of non-executive directors is to balance the power of the executive and to serve as a counterfoil to management serving self-interest.

Some of the principles that director rotation seeks to address (including bringing in fresh perspectives, ensuring a smooth transition, retaining knowledge) could also be applicable to executive directors. However, the succession of executive directors should be dealt with by the board through different processes.

"While South Africa is a leader in terms of good corporate governance, there are always aspects that are open to interpretation. We released these guidelines in response to requests from listed companies to clarify the JSE's interpretation of the King Code's rules regarding corporate governance," says Mervyn King, Chairman of the King Committee.

To view the practice notes visit http://www.jse.co.za/How-To-List/Listing-requirements.aspx

FOR MEDIA ENQUIRIES:
For JSE
Victoria Williams/Pheliswa Mayekiso
Corporate Communications Consultants
Tel: (011) 463 2198
Email: victoria@corpcom.co.za  / pheliswa@corpcom.co.za

On behalf of John Burke
Director of Issuer services
JSE Ltd
Tel (011) 520 7060

For Institute of Directors
Juanita Vorster
PR Republic
079 523 8374
Email: juanita@prrepublic.co.za

On behalf of Ansie Ramalho
Chief Executive
IoDSA
Tel (011) 430 9900

About JSE Limited
As South Africa's only full service securities exchange, the JSE connects buyers and sellers in four different financial markets, namely equities, equity derivatives, commodity derivatives and interest rate instruments. The JSE Ltd offers the investor a truly first world trading environment, with world class technology, surveillance and settlement in an emerging market context. It is amongst the top 20 largest equities exchanges in terms of market capitalisation in the world.
For further information, please visit www.jse.co.za

About Institute of Directors
The Institute of Directors in Southern Africa (IoDSA) is a non-profit organisation that is unique in that it represents directors, professionals, business leaders and those charged with governance duties in their individual capacities in southern Africa.
The IoDSA is committed to the development of those charged with governance duties, directors, board learning and improving board effectiveness.
Members of the IoDSA benefit from ongoing educational opportunities, leadership publications and updates featuring the latest developments in corporate governance, as well as unique networking opportunities.
For further information, please visit www.iodsa.co.za

distributed by
Recommend :
0
React to this article
Latest news
Date Title
<1m ago Australia government spending dips 0.6 percent in second quarter
2m agoDJAustralian Home-Building Approvals Rise
2m agoDJAustralian Home-Building Approvals Rise
11m ago ORCA EXPLORATION : announces Q2 2014 results
12m ago Japanese regular pay and bonuses rise in July, offer relief for PM Abe
16m ago EUR/USD TECHNICAL ANALYSIS : Euro Sinks to One-Year Low
16m ago SELECT EXPLORATION : Tenement Update
16m ago ZHONG AN REAL ESTATE : Next Day Disclosure Return (Revised)
16m ago CROWE HORWATH AUSTRALASIA : 1/09/2014, Recent tariff changes in car manufacturing
16m ago USD/JPY TECHNICAL ANALYSIS : Prices Advance to 6-Month High
Latest news
Advertisement
Hot News 
FORBIDDEN TECHNOLOGIES : Launches Alpha Test Of 'Eva' Video Platform
PERFORM : Final cash offer
WORTHINGTON : Re Agreement
SEEING MACHINES : Trading Up 25% As It Teams With Takata Corp
SHANTA GOLD : Reaffirms Production Guidance As First-Half Profit Rises
Most Read News
3h ago FORMFACTOR : Raises Third Quarter Guidance Range
3h ago STUART OLSON : announces sale of Broda Construction
3h ago EXELIXIS : Announces Results from the COMET-1 Phase 3 Pivotal Trial of Cabozantinib in Men with Metastatic Castration-Resistant Prostate Cancer
2h ago MEDICINOVA : to Present Data on MN-001 (tipelukast) for the Treatment of Idiopathic Pulmonary Fibrosis (IPF) During the 18th International Colloquium on Lung and Airway Fibrosis (ICLAF)
2h ago Akzo Nobel CEO solicited for Axalta bid worth more than $7 billion - Bloomberg
Most recommended articles
14h agoDJZambia Copper Miners Say Crippled by Unpaid $600 Million Tax Refund-Mines Body
3d ago S&P 500 edges up to set new record; best month since Feb
1m agoDJAustralian Home-Building Approvals Rise
2m agoDJAustralian Home-Building Approvals Rise
11m ago Japanese regular pay and bonuses rise in July, offer relief for PM Abe
Dynamic quotes  
ON
| OFF