It is easy to stand with the crowd. It takes courage to stand alone.
Mahatma Gandhi
Last week, we discussed corporate governance in the context of the Cadbury Report issued in December 1992 following a series of corporate failures. That report focused on the financial aspects of governance, mainly on the role of directors of companies, external auditing arrangements, and the work of audit committees. Some ten years later, following a series of accounting scandals in the United States, legislators found it necessary to enact the Sarbanes-Oxley (SOX) Act 2002 in a bid to restore investor confidence and to avoid any repeat of the matters that gave rise to Enron and WorldCom scandals, among others.
Today, we recognize another outstanding contribution to developments in corporate governance. We refer to the work of Prof. Mervin King of South Africa whose committee produced the first volume in 1994 known as “King I”. The main outcome was a set of recommended standards of conduct for boards and directors of listed companies, banks, and certain state-owned enterprises. Following the 2002 Earth Summit in Johannesburg, King I became King II and included new sections on sustainability, the role of the corporate board and risk management.
