I in practice I
CPD VERIFIABLE ARTICLE
To direct or to govern?
That is the question
enforced legislation) to put pressure on those that avoid doing what
Some of the principles King III advocates are that:
• the board should ensure that the company is and is seen to be a
responsible corporate citizen;
• the board should ensure that the company’s ethics are managed
• the board should act as the focal point for and custodian of
• the board should ensure that the company has an effective and
independent audit committee;
• the board should be responsible for the governance of risk;
• the board should be responsible for information technology (IT)
• the board should ensure that the company complies with
applicable laws and consider adherence to non-binding rules,
codes and standards; and
• the board should ensure that there is an effective risk-based
However, in my opinion, there is a fundamental problem in that the
composition of the 75 principles focuses unduly on control.
The role of directors is twofold, namely to direct and to control.
Please note the sequence: direct and control; not control and
direct! Approximately 67 of the 75 King III principles are control
principles, and only three are clearly directing principles. The
remaining handful can be argued both ways. Whatever your count,
King III is predominantly a document driving control, with a few
remarks about directing thrown in.