Critical analysis of principle one and two of King IV report on corporate governance : leadership and ethics

Abstract

Principle one and two of King IV Report on Corporate Governance which came into effect on the 1 April 2017 indicates that governing body should lead ethically and effectively, while principle two demonstrates that the governing board should guide the ethics of organisations in a way that supports the establishment of ethical culture. According to King IV report, principle one indicates that it is the responsibility of the governing body to cultivate collectively or individually, the six ethical characteristics, which are: Integrity; Competence; Responsibility; Accountability; Fairness; and Transparency. The six characteristics should also assist the governing body in setting the tone at the top to lead the organisation ethically and effectively, and the governing body should also be held accountable for them. Principle two indicates that the governing board should govern the ethics of the organisation in a way that support the establishment of the ethical culture in the organisation. Research methodology adopted for this study is qualitative. The existing literature and practices of organisations were systematically reviewed and synthesised. The process involved the review of journal papers, books, Commissions reports, and internet sources. The systematic review of the literature was an attempt to answer the research question aimed at drawing a more reliable finding from which conclusion could be drawn. The governing body should, therefore, take the responsibility of ensuring that there is the governance of ethics in the organisation. This is a conceptual paper, and critically analyses assess and discuss the envisaged ethics as per King IV report on corporate governance. Ethical leadership in the organisation remain an evasive commodity; hence, the many failures experienced in the different organisations.