King V Code: a clearer code for a changing world

On 31 October 2025 the King Committee released the IoDSA King V™ Report on Corporate Governance¹ (Code) effective for financial years commencing after 1 January 2026. The King Committee rewrote King IV replacing it with King V primarily to ensure the code remains relevant in a rapidly shifting business, regulatory, and technological landscape, while increasing usability and simplifying compliance.

The Code was aligned with legislative reforms, including the Companies Amendment Act changes, and the recent release of the sustainability standards. The sections relating to data and technology was also rewritten to take updates into account.

Probing the principles

 King V only includes 13 principles, some of the  17 King IV principles being consolidated.

Principle 1, Leadership now includes the former principles 6  (Primary role and responsibilities of the governing body) and 9 (Evaluations of the performance of the governing body) which dealt with the positioning of the governing body as focal point of governance and the board evaluation. 

Principle 3 (Responsible corporate citizenship) which dealt with the board as a responsible corporate citizen was incorporated in principle 2 dealing with Ethics.

Principle 17 dealing with the governing body of institutional investors was removed and institutional investors are encouraged to apply both the King Code and the Code for Responsible Investment in South Africa (CRISA).

Some changes that should be noted includes the following:

·  Principle 5, Composition of the governing body - Independence

The Code states that the governing body may categorise its non-executive members are independent if it can be concluded that there are no interest, position, association or relationships which when judged from the perspective of a reasonable and informed third party is likely to cause bias or influence decision making. The factors to be considered by the governing body was amended and now requires a cooling off period for executive managers of three years without having any significant involvement in any capacity to the organisation to be able to be classified as independent.

The King IV Report stated that a non-executive member can continue to serve in an independent capacity for longer than nine years subject to an assessment every year after the nine years has passed. The nine years consideration has now been included in the factors to be considered when evaluating independence.

· Principle 6, Committees

The principle still includes guidance on the audit committee, social and ethics committee, committee responsible for remuneration governance and the committee responsible for risk governance.

The membership requirements for the social and ethics committee and the committee responsible for risk governance was amended to require at least one independent member in addition to the requirement that the committee should comprise of executive and non-executive members with a majority being non-executive members.

· Principle 10, Data, information and technology

The principle was amended and updated to now include emerging, innovative and disruptive technologies which includes artificial intelligence (AI) and blockchain.

Reference to AI now includes adherence to behaviours such as ethics, accountability and fairness and trustworthiness.

· Principle 11, Remuneration

The section relating to remuneration governance was shortened from the King IV report and the updated Code removed all the requirements covered in the Companies Amendment Act,16 of 2024 (Companies Amendment Act) (effective date of the sections related to remuneration still to be proclaimed).

The Code sets out certain information that should be addressed in the remuneration policy.

The Companies Amendment Act requires public and state-owned companies to prepare and present a remuneration policy and a remuneration report which includes the policy, a background statement and an implementation report.  The remuneration report must be presented and approved at the annual general meeting (AGM) by ordinary resolution [for JSE Listed entities this will take the form of a separate non-binding advisory vote].

The Code recommends that all companies required to appoint a social and ethics committee in terms of the Companies Amendment Act must submit their executive remuneration policy and remuneration disclosure for a non-binding advisory vote at the AGM². This includes all companies with a Public Interest Score of more than 500 in any two of the last five financial years making its application more extensive than that of the Companies Amendment Act.

Decoding double materiality

The concept of double materiality for the purpose of sustainability disclosures  in the Code has been a discussion point due to differing international practices.

There are two approaches to materiality in the sustainability standards:

- Reporting on financial information that is important to investors and suppliers of capital (single materiality)

- Reporting on the impact of the organisation on the economy, society and environment (Impact materiality)

The Code includes ‘double materiality’ which integrates single and impact materiality for sustainability disclosure and organisations

King V Foundational concepts 2025 describes double materiality as an expression of integrated thinking stating “This means that organisations should include not only information about matters that significantly affect the organisation’s financial position, performance and prospects but also information about matters that significantly affect stakeholders over time”.

Disclosure Framework: from design to detail

The Code was now published in four different documents that should be read together, and includes:

1. King V Foundational concepts
2. King V Code
3. King V Glossary 
4. King V Disclosure template

The Disclosure Framework is a departure from previous codes where the King Committee now provides a framework that entities must use to set out how the principles were applied or if not applied, explain the reasoning. 

The Disclosure Framework assist entities in providing a format for disclosure in a standardised manner. This will assist the entity and stakeholders, who can now use this disclosure document to understand how the entity applied the Code. The Disclosure Framework must be published on the organisation’s website with the other reports. The Disclosure Framework also provides for the use of links, so where information is covered in another report, it can be linked to those reports to avoid duplication.

Application

The King V code is a voluntary principles-based framework. Organisations can elect to apply the Code but it is important to note that stakeholders often place reliance on it as an indication of good governance standards.

JSE listed companies must take note that the simplified JSE listings requirements, effective 13 January 2026 requires that all applicant issuers must adopt and apply the King Code, which will include the disclosure regime.

The King V Code on Corporate Governance is effective for financial years beginning on or after 1 January 2026 and replaces the King IV Report. Organisations should evaluate their application of the Code and start transferring and include information on the Disclosure Framework.

Conclusion

As organisations prepare to apply the King V Code, it is important not only to communicate expected changes to stakeholders but also for preparers to familiarise themselves with the updates and ensure that disclosures—particularly those required by the new Disclosure Framework—are accurate and complete. In this first year of implementation, entities should carefully evaluate how each principle has been applied and, where a principle has not been adopted, provide a clear and meaningful explanation for their chosen approach.

¹_{Copyright and trademarks are owned by the Institute of Directors in South Africa NPC and all of its rights are reserved}

²_{For entities listed on the JSE, section 5.7 of the Listings Requirements requires that the full remuneration policy and implementation report be tables every year for separate non-binding advisory votes at the AGM.}

Author:

Juanita Seenekamp, Senior Manager