How Mervin King changed the think­ing of gov­er­nance, glob­ally

The Star Late Edition - - BUSINESS REPORT - Brenda Kali Be­yond Cor­po­rate Sludge: In­sights to create bal­ance and har­mony in the cor­po­rate world.

IT WAS Vir­ginia Woolf, an English writer re­garded as one of the fore­most mod­ernist lit­er­ary fig­ures of the 20th cen­tury, who took refuge in sui­cide and wrote: “I have a feel­ing that I shall go mad and can­not go on any longer in these ter­ri­ble times.”

Ter­ri­ble times in­deed, when good peo­ple are thrown into de­spair and the false, cruel and di­a­bolic be­come pow­er­ful both in busi­ness and so­ci­ety.

The whirling vor­tex of undis­ci­plined be­hav­iour that saw the eth­i­cal des­ti­tu­tion of a na­tion in the re­cent State of the Na­tion Ad­dress this past week is a ter­ri­ble time. Be­neath the dark dis­tress of stag­ger­ing head­lines lies an ur­gent need for con­scious lead­er­ship and a few good men and women to stand up and show them­selves.

For­tu­nately, this na­tion has pro­duced the likes of Man­dela, Tambo and Tutu, to name but a few, and their legacy of con­scious­ness stands us in good stead. Cur­rently we have among us the in­spired ef­forts of con­scious lead­ers who have made an enor­mous im­pact on the world stage.

One such unique leader is our very own Pro­fes­sor Mervyn King, the guru of con­scious gov­er­nance and chair­man of the In­ter­na­tional In­te­grated Re­port­ing Coun­cil. Un­der his watch as chair­man of the King Com­mit­tee on Cor­po­rate Gov­er­nance, the King I, King II, King III and King IV Re­ports on cor­po­rate gov­er­nance were pub­lished, the im­pli­ca­tions of which had changed for ever the think­ing on gov­er­nance glob­ally.

His nu­mer­ous in­ter­na­tional awards for mak­ing a dif­fer­ence in the world, in­clud­ing the Life­time Achieve­ment Award in Lon­don from the In­ter­na­tional Cor­po­rate Gov­er­nance Net­work for ad­vo­cat­ing qual­ity gov­er­nance glob­ally, has him cel­e­brated as our na­tional trea­sure on the world stage.

Eth­i­cal lead­er­ship

King IV pro­vides more than an in­tel­lec­tual un­der­stand­ing of con­scious­ness. It states that eth­i­cal lead­er­ship should re­sult in the four out­comes of trust and con­fi­dence in the com­pany: le­git­i­macy, ad­e­quate and ef­fec­tive over­sight, value cre­ation in a sus­tain­able man­ner and a tone at the top of act­ing with in­tel­lec­tual hon­esty in the best in­ter­ests of the com­pany hav­ing re­gard to the le­git­i­mate and rea­son­able in­ter­ests, needs and ex­pec­ta­tions of all its stake­hold­ers.

Giv­ing par­ity to all the le­git­i­mate and rea­son­able needs, in­ter­ests and ex­pec­ta­tions of these stake­hold­ers cre­ates a value cre­ation process in a sus­tain­able man­ner rather than profit in the short term. It is the plague of short-term profit that was one of the main driv­ers of the global fi­nan­cial cri­sis.

The 17 Sus­tain­able Devel­op­ment Goals is­sued by the UN in April 2015 can be clus­tered un­der the six capitals in­cluded in the In­ter­na­tional In­te­grated Re­port­ing Coun­cil’s Frame­work of how to think on an in­te­grated ba­sis and how to do an in­te­grated re­port.

The duty of ac­count­abil­ity con­notes that it must be un­der­stand­able to the user. To merely do the an­nual fi­nan­cial state­ments as your an­nual re­port does not tell the full story of what is hap­pen­ing in­side a com­pany. Re­search has shown that since the late 1990s more than 70 per­cent of the mar­ket cap­i­tal­i­sa­tion of listed com­pa­nies has been made up of in­tan­gi­ble as­sets which are not as­sets in­cluded in a bal­ance sheet ac­cord­ing to fi­nan­cial re­port­ing stan­dards.

The col­lec­tive mind of the board has to be ap­plied to give equiv­a­lence to the six sources of value cre­ation, hu­man, fi­nan­cial, in­tel­lec­tual, man­u­fac­tured, nat- ural and so­cial. The lat­ter in­cludes the re­la­tion­ships be­tween the com­pany and its stake­hold­ers.

“The leader must be aware of the tone at the top,” King says, “the tune in the mid­dle and the beat of feet at the bot­tom of the or­gan­i­sa­tion. His ear must be close to the ground in or­der to lis­ten to that tune. He must make sure that the morale in the or­gan­i­sa­tion is high and the cul­ture is one of pride with a de­sire to be part of achiev­ing that ul­ti­mate goal.”

Con­scious lead­er­ship

This is con­scious lead­er­ship in ac­tion. So among the few good men and women, Mervyn King joins the panel of judges as chair­man for the Con­scious Com­pa­nies Awards 2017 that in­cludes Dr Reuel Khoza, who is an ad­vo­cate of a new man­age­ment and lead­er­ship cul­ture based on in­clu­sive afro-cen­tric­ity and ubuntu. He was the found­ing chair­man of the Nepad Busi­ness Foun­da­tion.

Nom­ahlubi Si­ma­mane is a sci­en­tist who mor­phed into a brand strate­gist. She is the found­ing mem­ber of Zanusi Brand So­lu­tions and serves on sev­eral boards.

The clos­ing date for nom­i­na­tions for the Con­scious Com­pa­nies Awards 2017 is March 12. The gala event will be held at the Hy­att Re­gency Ho­tel on May 11, in part­ner­ship with Busi­ness Re­port and Clas­sic FM.

To nom­i­nate your con­scious com­pany: http://www.con­scious­com­pa­nies.co.za. E-mail: awards@con­scious­com­pa­nies. co.za or call 076 591 8165. Brenda Kali is the MD of Con­scious Com­pa­nies, a com­mu­ni­ca­tion strate­gist and a trans­for­ma­tion coach. She is the au­thor of

PHOTO: SUP­PLIED

Pro­fes­sor Mervyn King and Prince Charles. The King Re­ports have changed for ever the think­ing on gov­er­nance glob­ally.

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