South Africa: King V – what companies need to know

Why King V matters

King V builds on King IV, aiming to simplify corporate governance, align with amendments to the Companies Act, and reflect evolving best practices in transparency, independence, remuneration, sustainability reporting, and technology governance.

While not legislation, King V’s principles have been adopted as market best practice by most corporates, society and activists alike. King principles are frequently considered by courts, which have been known to reference King when rendering judgement against errant directors; and have been incorporated into listing requirements, giving teeth to the requirements for listed companies.

Key changes in King V at a glance

King V, anticipated to be released in final form on Friday 31 October 2025, with an effective date of 1 January 2026, retains an apply‑and‑explain regime, but introduces a more standardised disclosure approach.

It shifts emphasis toward sustainable value creation, transparency and whistleblower protection, broader stakeholder interests, governing body independence considerations, and data and technology stewardship.

The Code specifically references a broader definition of stakeholders and incorporates concepts such as climate change and ESG, replacing the ‘six capitals’ and ‘triple context’ with ‘resources and relationships’ and ‘economy, social and environment’.

Structurally, the ‘Report’ bifurcates into standalone components, with the ‘Code’ housing principles and practices, and separate documents covering disclosure and explanatory guidance. Sector supplements are deleted so that all sectors are governed by the same general principles, to be read together with any other sector regulation. For example, principle 17 dealing with institutional investors is removed. Institutional investors are directed to the general principles to be read together with the Code for Responsible Investing in South Africa (CRISA)

New disclosure regime

King V proposes a new disclosure template that corporates should compile. It should be signed by the company’s governing body and published and kept up to date on its website. The template extracts the principles and practices from the Code, with a requirement to disclose any departure, coupled with an explanation.

This template is anticipated to concentrate market focus on specific departures and the quality of boards’ explanations, raising the bar on transparency and comparability across issuers. Careful thought needs to be given to the compilation of the disclosure template, disclosing the scope and duration of deviations and how the principles are still achieved, bridging public interest and governance on a proportional basis, showing application of mind and detailing any mitigation measures, all subject to other legal requirements.

Principles re-cast

There has not been a significant departure in King V from the principles and practices in King IV. The new principles, and primary nuanced shifts introduced by King V are as follows below.

1. Ethical leadership and governance outcomes (Principle 1). King V consolidates several King IV principles and clarifies the governing body’s responsibilities for strategic direction, policy, implementation, reporting, and self‑evaluation. The definition of ‘stakeholder’ is broadened to those significantly affected by, or affecting, the organisation’s value creation over time, expressly encompassing communities, NGOs, environmental groups, and policymakers. This wider definition of stakeholders requires a balancing act by boards exercising their fiduciary duties in determining how wide to cast this net.
2. Organisational ethics and corporate citizenship (Principle 2). King V expands corporate citizenship to integrate external stakeholder interests and contemporary concerns, including climate change and sustainable resource use. It calls for internal ethics surveys, whistle‑blower reporting and protections, and incorporation of codes and ethics policies into stakeholder contracts. ‘Purpose’ is reframed beyond profit to the organisation’s reason for existence. For more detailed support on whistleblowing processes and readiness, reach out to members of our Employment and Corporate Investigations team.
3. Strategy and sustainability (Principle 3). Boards must ensure that purpose, business model and strategy create sustainable value within the broader economic, social and environmental context, applying integrated thinking, clear KPIs and targets, and effective oversight. Definitions of ‘value creation’ and ‘sustainability’ are refined to emphasise use of resources and relationships without harm, ideally reversing prior harm and enhancing transformations.
4. Reporting and double materiality (Principle 4). Reporting shifts from performance to sustainable value, introducing explicit double materiality in sustainability reporting, requiring both financial materiality and impact materiality assessments. Boards are responsible for determining the reporting suite and applicable standards, overseeing sustainability reporting and the annual integrated report, and ensuring accuracy and adequacy.
5. Board composition and independence (Principle 5). What it means to be an ‘independent’ board or committee member receives heightened scrutiny. Notable developments include:
   • Related parties: The assessment of independence criteria is now also in respect of any ‘related party’ to the individual. Related party has the same definition as in the Companies Act but also applies to organisations other than companies.
   • Cooling‑off periods: A three‑year cooling‑off from executive roles remains, with an added two‑year period without significant involvement in any capacity where a member was previously employed as an executive beyond the preceding three financial years.
   • Tenure: The nine‑year benchmark becomes an explicit factor in independence determinations. Exceeding nine years may remain compatible with independence, but only with a robust, evidence‑based assessment and appropriate disclosure and explanation.
   • Remuneration linkages: Performance‑linked remuneration triggers independence concerns only where such remuneration is material to the member’s income. Participation in share‑based incentive schemes is removed as a stand‑alone factor.
   • Supplier relationships: Independence concerns now include being a supplier of goods or services (extending beyond merely being a supplier of ‘professional advice’, but no longer applies to being a ‘customer’. Relationships with related parties are also expanded to ‘significant relationships,’ not limited to executive or director roles.

Although certain other prescriptive practices have been deleted from King V, the intention is for these to be addressed in guidance material.

6. Committees and enhanced independence (Principle 6). Committee governance is sharpened. Risk and social and ethics committees must include at least one independent member and a majority of non‑executives. Nomination committees must be chaired by an independent non‑executive. Audit committees must assess the CFO and finance team. Terms‑of‑reference guidance has been deleted but is likely to appear in guidance material.
7. Management delegation (Principle 7). Core requirements for appointment, delegation, succession planning, evaluation, and governance services continue. Annual reviews of company secretarial independence are no longer prescribed.
8. Risk and compliance (Principle 8). The framework continues to require risk and compliance policies, oversight of voluntary codes and standards, and periodic assurance, with no major substantive change.
9. Information governance, data and emerging tech (Principle 9). This principle has been overhauled to integrate IT, data, and emerging technologies under a single information governance framework. Boards must ensure strategies, policies, security, risk management, data architecture, human oversight, and ethical standards for emerging tech that maximise value and minimise risks and costs. Expectations rise for responsible AI, data stewardship, and transparent practices. For detailed support on cyber resilience and major incident readiness, reach out to members of our Major Incidents team. For support on policy drafting and contracting with tech service providers, contact members of our TMT team.
10. Remuneration governance and engagement (Principle 10). Most of the requirements of King IV on remuneration were incorporated into the latest changes to the Companies Act, which have been signed into law but are not yet in effect. King V has therefore deleted most of the requirements that have now become statute to avoid duplication, only retaining those aspects of the principle that fill gaps that exist in the Companies Act provisions.
    Emphasis remains on fairness, transparency, and alignment with sustainable value creation. Non‑binding shareholder votes on remuneration are retained for audited companies not otherwise subject to statutory votes, alongside proactive shareholder engagement. For more detailed support on remuneration structures, calculations and processes, reach out to members of our Reward Advisory team.
11. Assurance and combined assurance (Principle 11). Assurance is reframed to support the integrity of both decision‑making and disclosures. The definition of assurance is simplified, with the detailed list of assurance providers and the sub‑section on assurance of external reports removed to avoid overlap, while combined assurance and internal audit expectations remain robust, including periodic external quality reviews.
12. Stakeholder‑inclusive governance and group oversight (Principle 12). King V deepens stakeholder identification, risk integration, and engagement obligations. For groups, it contemplates a holistic governance framework at holding company level, clear delegation arrangements, protocols to manage information‑sharing risks, and aligned policies, structures and procedures. At AGMs, the chair of each board committee must be present to respond to questions, and listed companies should release AGM minutes within a reasonable time.

Practical implications and immediate actions

Some of the actions for boards and executives are set out below. A phased plan over the next 12 to 18 months will help avoid compressed year-end timelines and reduce the risk of disclosure weakness or governance-related challenges.

• Structured readiness: Governing bodies should start the process of mapping King V practices against current governance arrangements, committee compositions, policies, and disclosures, identifying gaps, especially on independence assessments, committee chairing and composition, information governance and emerging tech oversight, remuneration policy disclosures, and stakeholder engagement protocols.
• Refining approach: Governing bodies should then be applying their minds to any remedial actions or mitigation measures that could be put in place to align closer with requirements. This may also require the update of board charters, committee terms, nomination protocols, and independence assessment frameworks to address related‑party dimensions, tenure assessments, cooling‑off requirements, and supplier relationships. Consideration may also be required to ready the reporting suite for double materiality, integrating financial and impact materiality into sustainability reporting, and align data governance, assurance, and internal audit plans to support the accuracy and completeness of disclosures.
• Disclosure template build: Governing bodies should start the work of compiling the new disclosure template, carefully considering the bridge between proportional compliance and governance. Also important is designing the new disclosure template process, including governing body sign‑off, website publication, and periodic updates, with clear accountability, controls, and timelines.
• AGM readiness: Particularly in instances where there are known activist investors, AGM readiness will be critical to ensure among other things committee chairs’ attendance and investor engagement on remuneration and sustainability matters is well planned, with clear messaging and supporting data.

How we can help

We are supporting clients with readiness assessments, independence policy and nomination framework updates, disclosure template design and governance, double materiality, information governance and AI oversight frameworks, remuneration policy and reporting refreshes (including wage-gap analytics and sustainability-linked performance), AGM preparation and shareholder engagement strategies tailored to sector context and stakeholder expectations, whistleblowing policies and approach and major incidents avoidance and readiness.

If you would like to discuss how King V may affect your organisation, or need assistance to benchmark your current approach against the draft Code, please contact your usual relationship partner.

We also offer bespoke training for boards, committee members, and management on the draft King V Code, whistleblowing, major incidents readiness, remuneration governance, and information governance for emerging technologies.