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Johannesburg - Corporate governance expert professor Mervyn King said the fact that a handful of listed companies have been found wanting in complying with principles of good corporate governance has not tainted the reputation of big corporates.
Speaking to City Press shortly after addressing members of the Association of International Certified Professional Accountants and Chartered Institute of Management Accountants at a breakfast event in Parktown this week, King said listed companies in the majority comply well in corporate governance.
“They are doing well. You must appreciate that there are nearly 400 listed companies.
“When one starts getting into trouble you can’t say they are all in trouble,” he said, mentioning that the Steinhoff saga is often misunderstood as the company is listed both locally and in Germany.
He said the two jurisdictional legal structures are vastly different.
King said the majority of the listed companies are actually compliant and in fact the top 100 companies on the JSE are rated among the best in the world.
“As South Africa, we are struggling to attract foreign investment. The one area where there is still money flowing into the country is through the equities of companies listed because they say there are extraordinary directors who are directing these companies on a well-governed basis,” he said.
“The top 100 companies on the JSE are seen as among the best-governed companies in the world,” he said.
At the event King said companies are now operating in an environment of radical transparency compared with a decade or two ago.
“We have radical transparency, if you think you can hide a corporate secret in the closet in the office, forget it,” King said.
King also said because the directors of a company become the mind, body and soul of a company, it is wrong to refer to shareholders as owners of a company as they have no duty and responsibility towards it.
He pointed out that a company is a creation of society.
“To have sustainable development by 2030, we need to accept that the three dimensions of economy, society and environment are indivisible and integrated and they need to be taken account of strategically in developing a business model to achieve sustainable development and stability in the world economy,” he said.
He further pointed out that it was no longer an option to do business as usual and that there should be a shift from the maximisation of shareholder wealth at a cost to the environment to the long-term health of the company.
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