What do the JSE listing requirements say about the King Code? Is the King Code part of the requirements? Do listed companies have to comply with the King Code principles? Have the requirements changed since King III or are they still the same?
The JSE Listing Requirements and King IV
The JSE amended the JSE listing requirements twice after the Institute of Directors in Southern Africa (IoDSA) released the final version of King IV™. Under the most recent amendments (May 2017) by the JSE, listed companies do not have the choice that non-listed companies have – the choice to apply only some of the King Code principles and recommended practices, and explain the ones they have not applied. Listed companies must apply all the latest King Code principles, and recommended practices, including IT Governance (sometimes called IT Governance, Risk and Compliance).
The latest JSE guidelines require listed companies to include an explanation of how they comply with King Code principles and recommended practices.
The May 2017 amendments to the listing requirements mean that listed companies must not only apply King Code principles, but must also explain. Listed companies will have to study the King Code very closely. The steps they will have to take include appointing company secretaries, and various committees such as audit and remuneration committees.
The JSE can suspend a listed company’s listing if they do not apply all the King Code’s principles and recommended practices, and explain how they applied it.
The May 2017 amendments are available here. The previous version of the JSE Listing Requirements (a latest version that incorporates the recent amendments has not been published yet) is available here.
When do the amendments take effect?
The amendments take effect in the following way:
- for already-listed companies (companies that listed before the 19th of June) it is from 1 October 2017 and onwards, and;
- for any new company listings (companies that list on or after the 19th of June) it is from 19 June 2017 and onwards.
Listed companies will have to work out how these two effective dates fit into the timeline the King IV effective date created. The answer to how all these dates will fit into the timeline is not immediately clear.
Actions you can take
- Make the right disclosures for King IV by asking us to assist you. We have created clever ways to assist you to draft accurate and customised disclosures for your organisation as painlessly as possible.
- Transition from King III to King IV™ by getting our King III to King IV Comparison Tables and King Planning Tool.
- Understand how the timeline of the effective dates for King IV and the latest JSE Listing Requirements affects your compliance by asking us to advise you.
- Consider the differences between King III and King IV by reading our summary and getting tables and tools from us.
- Align your IT policies with the King IV™ principles by asking us to review or draft IT policies that are compliant with the principles.
- Subscribe to our newsletter to stay up-to-date with the latest developments.
If you are interested, please complete the form on the right or enquire now. We will contact you to find out more about your requirements and give you a quote.
The JSE Listing Requirements and King III
There was much confusion with whether or not listed companies had to comply with King III on governance, or whether they had room to not apply it and then explain why they had not. Many thought that a listed company had to comply with the whole of King III, because it was a listing requirement. That is the time when the JSE published the guideline in its listing requirements to help clarify the situation. The JSE’s approach was that certain principles were mandatory and must be complied with, while others were not. None of the IT Governance principles were mandatory, but some principles that have an impact on IT Governance were.
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Note: The Institute of Directors in Southern Africa NPC (IoDSA) owns the copyright to all four of the King reports or codes on governance (including the latest version namely the King IV Report™) and owns various trademarks in relation to King IV (including King IV™, King IV Report™, King IV Report on Corporate Governance™ and King IV Code™). All of the IoDSA’s rights are reserved. All views are our own and we are not associated or endorsed in any way by the IoDSA.