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Johannesburg - Corporate governance, sustainability and strategy are inseparable in today's business world.
These were the words of corporate governance guru Mervyn King in Johannesburg on Friday, when commenting on the new Companies Act and the amended King report, King III.
King handled issues such as the independence of directors and the future role of internal auditors in the business environment. He pointed out that companies needed to adapt their annual reports and no longer focus merely on the financial aspects of the business.
"Reports must be easy to understand since communities also have an interest in companies doing business in their environment.
"Companies must inform communities and shareholders about the positive and negative impacts they have had on role-players over a certain period. These stakeholders must also be informed as to how things will improve - or otherwise - in the period ahead."
As to the role of internal auditors, King stated that their function is now one of the most critical for any company. "The internal auditor must be moved from the back room to the boardroom."
King acknowledged that skills shortages could still play a role in companies' ability to comply with King III and the Companies Act.
King III should be available by September 1 this year. The amended Companies Act comes into force only in June 2010.
- Sake24.com
For more business news in Afrikaans, go to Sake24.com.