voiced their disapproval of the wilful and unethical business practices carried out by its leaders. Kenneth Lay and Jeffrey Skilling were both aware of the organisation’s accounting loopholes and poor financial reporting, ultimately costing their stakeholders billions of dollars.
Since the occurrence of some of the world’s most spectacular corporate governance scandals, evidenced for example through the cases of HP, Siemens, Arthur Anderson, Barings Bank, Fannie Mae, Parmalat and WorldCom, business leaders and civil society have had ample opportunity to understand the main reasons which led to their public exposure, and, in most instances, to their demise. Expectedly, South Africa has also had its fair share of corporate governance scandals and failures, some of these being found in the cases of Macmed, Tigon, Regal Treasury, LeisureNet, Saambou, and Frankel International & Frankel Chemicals.
Irrespective of where these examples of poor governance may have occurred, they all have a common thread comprising any one or all of the following dire components: voracious greed, deceitfulness, people with an insatiable appetite for self-gain and self-preservation, and even outright fraud and corruption. That said, whilst many South African organisational leaders in business and government will undoubtedly have come across the worldrenowned, and comprehensive, King Reports on Corporate Governance, the vast majority of these leaders may not have realised just how significant the King Reports have become across the world.
These reports provide important guidelines which, if followed correctly, can prevent future corporate governance failures and collapses of businesses, government entities and structures, not least the mistrust which is so often linked to these failures. South Africa can be very proud of the fact that much of the thinking and effort which have gone into the three King Reports on Corporate Governance have essentially been driven by a well-known former judge of the Supreme Court of South Africa: Professor Mervyn King SC. This extraordinary person has not only changed the thinking surrounding the principles of sound governance and its application in our daily business routines, but he has also significantly highlighted what the world is likely to become in the event that our natural resources are exploited at the current rates of consumption.
It’s not a pleasant scenario which Professor King presents, and it is for these reasons, which include his wealth of knowledge and experience, that he was elected as the Chairperson of the International Integrated Reporting Council (IIRC), this being just one of his many and notable international achievements.
Furthermore, noting Professor King’s incredible contributions to integrated reporting, he was recently awarded an honorary fellowship of the CIMA (Chartered Institute of Management Accountants) by the President of the CIMA, Gulzari Lal Babber, who travelled from London to make the award. Notably, Professor King is the first South African to receive an honorary fellowship of the CIMA and only the sixth person in the 93 years of the Institute to be so honoured. Shortly hereafter, he was further recognised by the International Federation of Accountants (IFAC) in November 2012 by its President, Göran Tidström, when he received IFAC’s prestigious International Gold Service Award for his outstanding contributions to the accountancy profession.
In many respects, Professor King may be regarded as the ‘godfather’ of corporate governance; some even refer to him as the ‘custodian of corporate governance’ across the world. Considering his impeccable and illustrious career, which includes the roles he has fulfilled as a corporate advocate, arbitrator, mediator, corporate director, commission chair, author and public speaker, these descriptions are more than befitting for one of South Africa’s greatest. Comparatively speaking, whilst Professor King has received many international awards for his work on corporate governance, he has remained one of South Africa’s unsung heroes.
One of Professor King’s earlier and bold career moves – which epitomised his deeply grounded morals – may be highlighted in 1980 when he took a brave and incredibly unusual step of resigning as a judge of the then Supreme Court of South Africa, following an issue on which he wanted a public hearing and Prime Minister Botha did not agree. It was after that highly publicised resignation that Professor King became involved as a director and chairperson of companies.
A discussion between President Mandela and Professor King has remained confidential between them, but suffice it to say that it was followed by Professor King becoming involved in the formation of the King Committee and thereafter chairing and directing the committee which produced King I, King II, King III – and now he chairs the internationally famous IIRC. Indeed, amongst Professor King’s very many notable achievements and awards, he was also elected as President of the Advertising Standards Authority of South Africa (ASA), a position in which he served for 15 years. The changes he brought about at the ASA were notable.
Prior to his appointment at the ASA, the ASA’s judgments were in the main oral; however, during Professor King’s tenure, an enormous body of advertising and marketing jurisprudence was created and attracted the interest of regulators in this field around the world. Points dealt with by Professor King in his judgments were often ahead of judgements delivered by the High Court and the Constitutional Court of South Africa. More important than all of these achievements are the achievements of Professor King as a man and human being. His marriage of many years to his lovely wife, Liz, has produced two sons who are highly successful in their chosen fields.
He enjoys a close relationship with his sons and is adored by his grandchildren. Professor King loves his sport and wine, and has an outstanding sense of humour and a keen and often wicked wit. He is admired, loved and respected by his enormous circle of friends around the world, and many people have beaten a path to his door when help and assistance have been needed, never to be turned away. Professor King remains a warm, caring and approachable person, notwithstanding the international accolades and awards which have been bestowed upon him, and continue to be bestowed upon him. He is a true and great son of the African soil and will no doubt continue to contribute enormously to a country which he loves and admires, but equally will never hesitate to criticise when things are not done in accordance with his exact and precise standards.
We salute you Professor King for the manner in which you have served South Africa and for being the fine ambassador that you have been for South Africa over these many years.
Of course, the topic in namesake – corporate governance – may be fancy, but, simply put; it is really about applying good discipline and complying with a set of acceptable practices which meets with the approval of ethically and morally grounded principles. No matter its guise, corporate governance has been in existence for centuries. It is not a foreign concept at all, except that, in more modern times, as people have become more entitled to openly air their disapproval of various matters – especially when they have been personally aggrieved – it is a topic that is more often raised.
Indeed, corporate failures such as that of the Enron Corporation – an American energy giant at the time – showed just how empowered ordinary individuals and employees have become when they
CORPORATE GOVERNANCE | Ode to a King