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LEGAL NOTE: JANUARY 2026 | KING V CODE OF CORPORATE GOVERNANCE - A SUMMARY

The Institute of Directors in South Africa (IoDSA) adopted the final version of the King V Code on Corporate Governance on 31 October 2025. This update refines local governance standards and simplifies the code for easier applications, while retaining the core principles of King IV. The King V code on corporate governance 2025, is set to take effect for financial

years commencing on or after January 2026, and applies to all governing bodies, including the board of trustees of a retirement fund. Organisations must therefore begin applying

King V for their first financial year that commences on or after 1 January 2026.


The KING V Code is outcomes-based and seeks to ensure an ethical culture and leadership, sustainable value creation, risk and compliance integration and stakeholder inclusivity. King

V applies to all organisations, including retirement funds and insurers. It is structured into four parts, namely:

  • KING V Code

  • KING V Foundational Concepts

  • KING V Glossary

  • KING V Disclosure Framework


The code uses an “apply and explain” disclosure system and provides a reporting template to guide organisations.


Key changes from King IV include:

  • A deconstructed format replacing the single-document structure of King IV, with King V presented as distinct documents that are directly accessible via a single IoDSA webpage, but integrally connected and intended to be read together;

  • Emphasis on “systems value” in sustainability value creation, where organisations recognise that their interests do not merely overlap with, but are an integral part of the broader economic, social and environmental systems within which they are embedded;

  • Organisations should create value for these systems, recognising that long-term organisational success relies on the vitality and resilience of surrounding socio-ecological systems;

  • Consolidation of 17 principles into 13, including the removal of King IV Principle 17, which specifically addressed institutional investors (which should apply both King V and the Code for Responsible Investing in South Africa (currently CRISA 2));

  • Required use of the King V Disclosure Framework which operationalises the ‘apply and explain’ regime to disclose not only whether recommended practices have been adopted, but also to explain any deviations and the compensating measures implemented;

  • Enhanced committee composition requirements for risk and social and ethics committees, with the recommendation of including at least one independent non-executive;

  • Updated governing body independence criteria, including explicit assessment of relationships involving related parties, clarified cooling off periods and incorporation of the nine-year tenure as one factor among other relevant indicators (previously included as a separate recommended practice in King IV);

  • Expanded data, information and technology governance with AI requirements, including emphasis on establishing accountability in AI-related decisions, actions and outcomes;

  • Enhanced emphasis on double materiality (both financial and impact materiality) for sustainability-related disclosures; and

  • Refined and simplified remuneration governance practices due to, among others, the remuneration-related amendments in the Companies Act, 2008 (not yet effective)


The 13 Principles summarised

The Governing Body:

  1. Leads ethically and effectively.

  2. Governs ethics to promote an ethical culture and responsible corporate citizenship.

  3. Aligns purpose, strategy, and business model for sustainable value.

  4. Oversees external reporting for holistic stakeholder assessment.

  5. Ensures balanced composition of boards with diversity, skills, and independence (9-year tenure limit).

  6. Manages delegation to committees and individuals effectively.

  7. Appoints and delegates to management with clear accountability.

  8. Governs risk and compliance strategically.

  9. Ensures compliance with laws, codes, and standards ethically.

  10. Governs data, information, and technology to support objectives.

  11. Ensures fair, responsible, and transparent remuneration.

  12. Promotes effective assurance and internal control for accurate reporting.

  13. Adopts a stakeholder-inclusive approach for long-term interests.


Suggested Key Implementation steps include:

  • Assessing current governance frameworks and practices to identify areas requiring refinement or enhancement;

  • Reviewing and where necessary, updating governance policies, charters, and procedures to align with KING V;

  • Facilitating training for governing body members and senior management on KING V’s key changes;

  • Establishing processes to support transparent and consistent disclosure reporting and designing customised disclosure templates that align with the KING V disclosure framework requirements; and

  • Conducting early readiness evaluations.


In conclusion, KING V, South Africa’s fifth code of corporate governance gives Trustees a stronger, clearer set of expectations to help ensure retirement fund members’ interests are protected. By simplifying language and consolidating principles, it makes governance more accessible and practical. The integration of technology governance and enhanced disclosure framework reflects modern business realities, ensuring boards remain accountable in a digital and data-driven environment. The nine-year independence limit strengthens board objectivity, while the outcomes-based approach aligns governance with real-world impact rather than mere compliance.


This publication is provided as general information only. It is not advice and should not be relied upon without a discussion regarding your own facts and circumstances.

OPTIMUM EMPLOYEE BENEFITS (PTY) LTD | FSP 51031 | An Authorised Financial Services Provider | optimumgroup.co.za

 
 
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