King Report on Corporate Governance Essay Example | Topics and Well Written Essays - 2500 words

King Report on Corporate Governance - Essay Example This also calls for a more transparent disclosure by business entities of their established governance practices in their annual reports. Such reporting requirements are not limited only to public companies but even the privates companies are also expected to follow recognized governance policies and report thereon. Several initiatives have been taken to integrate and organize different principles of corporate governance and arrive at a set of definite guidelines. These initiatives were undertaken by various orgnisations and committees including the United Nations Conference of Trade and Development. Some of the other organisations and committees whose reports are used to form the guide lines are: Out of the above reports this paper envisages making a critical review of the King Report 2002 and also makes a comparative analysis of the Kings Report with the The OECD principles on Corporate Governance - 1999. This is the central theme on which the King (II) Report is evolved. The King (II) Report published in the year 2002 was prepared by 'task teams' consisted of representatives from institutional and private investors, civil society regulators, and government officials. This way the report aimed to bring in the view points of all kinds of stakeholders in to the report. "The King II Committee itself was composed of 'leading proponents' of corporate governance as well as 'representatives of significant professional, private and public sector institutions'. Local and international consultation was 'extensive', with the Institute of Directors in Southern Africa providing a 'facilitative role' and secretarial support" (Armstrong et al2005). King (II) contains CODE OF Corporate Practices and Conduct ('the code') and the report's recommendations are applicable to all companies listed in Johannesburg Stock Exchange and several other public and private organizations including certain government organisations. King II Report contains recommendations relating the following six areas of corporate governance: The role and responsibilities of the Board and Directors: The report recommends guidelines for fixing the accountability of the board of directors by redefining the responsibilities of the directors towards all the internal and external stakeholders including the shareholders The aspect of Risk Management: In order to achieve the organisational goal of wealth creation and also to sustain the growth of the company it is important for the board to follow recognized principles of risk management. The function of internal audit: The report identifies the critical role of an internal