IN 1994, THE YEAR THAT SOUTH AFRICA ENDED WHITE-MINORITY RULE and elected Nelson Mandela president, South African businesses underwent a more subdued but highly significant transition of their own. That year, a committee headed by Mervyn King, a corporate lawyer and former High Court judge, issued the "King Report on Corporate Governance." King I, as it is now known, incorporated a code of corporate practices and conduct that looked beyond the corporation itself, taking into account its impact on the larger community.
A second King Committee report--known inevitably as King II--was issued in 2002, taking this inclusive approach considerably further. "There is a growing weight of expectation on organizations to operate as good corporate citizens," the report says. "This is because of the influence they exercise on the lives of so many individuals. Each organization is the sum of its stakeholders, such as its shareowners, customers, employees, suppliers, and the communities within which it operates. It depends on them--individually and collectively--for the goodwill required to sustain its operations."
King spoke recently with Internal Auditor about King I and II and about how the South African initiatives compare with efforts to improve corporate governance in the United States.
Mr. King, the first King report was issued in 1994, during the momentous change in South Africa's government from white-minority rule to black-majority rule. What prompted that report and your involvement in it?
A second King Committee report--known inevitably as King II--was issued in 2002, taking this inclusive approach considerably further. "There is a growing weight of expectation on organizations to operate as good corporate citizens," the report says. "This is because of the influence they exercise on the lives of so many individuals. Each organization is the sum of its stakeholders, such as its shareowners, customers, employees, suppliers, and the communities within which it operates. It depends on them--individually and collectively--for the goodwill required to sustain its operations."
King spoke recently with Internal Auditor about King I and II and about how the South African initiatives compare with efforts to improve corporate governance in the United States.
Mr. King, the first King report was issued in 1994, during the momentous change in South Africa's government from white-minority rule to black-majority rule. What prompted that report and your involvement in it?
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