Doron Joffe, Executive | Joint Head of Department | Corporate Commercial, and Sanjay Kassan, Executive | Joint Head of Department | Corporate Commercial, at ENS

The King V Report on Corporate Governance, published on 31 October 2025, applies to financial years starting on or after 1 January 2026. King V refines (rather than overhauls) King IV and the transition should be manageable. However, King V introduces important updates that must not be overlooked and we provide key changes below:

1. Structure and simplification

King IV was a single, multi-part report. In contrast, King V is split into four separate documents: Foundational Concepts, the Code, the Glossary and the Disclosure Framework – all available online. This new structure is complimented by a shift to plain language, less jargon and clearer definitions. The number of principles has been consolidated and reduced from 17 to 13.

2. Disclosure

King V retains the “apply and explain” disclosure model but now requires organisations to use a standard Disclosure Framework. This framework sets out each principle, provides a column to declare any exceptions, and requires explanations for any practices not adopted (including alternative measures taken). Governing bodies must ensure disclosures are meaningful and not just a formality.

3. Key content changes

• Sustainability and reporting: King V requires the governing body to align the organisation’s purpose, business model and strategy to create sustainable value. Reporting should enable stakeholders to make informed, holistic assessments of sustainable value creation. The board must select reporting standards, determine the suite of reports to publish and publish an integrated report annually. King V explicitly supports sustainability disclosure based on double materiality: organisations must report on issues that affect financial performance and on those impacting their ability to create long-term value for stakeholders.

• Board composition and independence: King V maintains a holistic approach to board composition, emphasising competencies, balance and independence. Independence is assessed on a “substance over form” basis and defined as “the exercise of objective, unfettered judgement”. For non-executive members, it means “the absence of any interest, position, association or relationship that a reasonable, informed third party would view as likely to unduly influence or bias decision-making.” Updated independence criteria now explicitly address relationships involving related parties, clarifies cooling-off periods and recognise 9 years’ tenure as a key factor in evaluating independence.

• Board committees: King V introduces stricter rules for the composition of the risk committee and the social and ethics committee: both must have a majority of non-executive members, including at least one independent director. This is stricter than King IV and the Companies Act, which does not require independent members for these committees.

• Data, information and technology: King V significantly updates the approach to data, information and technology governance, reflecting rapid technological change and the rise of AI. The board must set the strategic direction and approve policies for the ethical, compliant and effective management of data, information and technology. There must be clear rules for using AI, focusing on inter alia human oversight, ethics, security and privacy.

• Remuneration: King V streamlines its approach to remuneration to align with recent changes to the Companies Act and to avoid duplication of legal requirements. Separate, non-binding advisory votes by shareholders on the remuneration policy and disclosure are recommended where not legally required (as is the case until the amendments take effect and, afterwards, for organisations that are not public or state owned companies). This practice applies only to entities required to have social and ethics committees based on their public interest score.

Conclusion

King V ushers in a new era of corporate governance in South Africa, demanding genuine leadership, transparency and integrated thinking. With its streamlined structure, robust disclosure requirements and heightened standards for ethical and effective governance, King V is expected to support organisations in building resilience and fostering long-term value.

ENDS