CORPORATE GOVERNANCE
How Mervin King changed the thinking of governance, globally
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, natural 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 Beyond Corporate Sludge: Insights to create balance and harmony in the corporate world.