By FCPA Dr. Eric Sambu
The King Code of Corporate Governance, initiated in 1994 by the Institute of Directors of Southern Africa (IoDSA), established South Africa as a global pioneer in governance. The release of the King V Code on October 31, 2025, marks a crucial evolution, positioning organizations to navigate an increasingly complex operating environment. This report provides an expert comparative analysis of the structural, philosophical, and operational shifts introduced by King V.
I. Strategic Context and Foundations
The review leading to King V was driven by the need to maintain a forward-looking benchmark amidst volatility, uncertainty, complexity, and ambiguity (VUCA). Key drivers included the climate crisis, geopolitical conflicts, rapid technological disruption (particularly Artificial Intelligence), and heightened stakeholder expectations regarding ethics and remuneration.
Continuity of the Outcome-Based Approach
King V maintains the core philosophy that governance is a means to realize four key outcomes: ethical culture, good performance, effective control, and legitimacy. It reinforces integrated thinking, recognizing the interconnectedness of people, the planet, and value creation across the “six capitals” (financial, manufactured, human, intellectual, natural, and social).
Implementation and Legal Status
King V replaces King IV in its entirety and takes effect for financial years starting on or after January 1, 2026. While it remains a principle-based, voluntary framework, Johannesburg Stock Exchange (JSE) listed entities must “Apply and Explain” their compliance. South African courts frequently reference the Code when determining director negligence, making it a persuasive legal standard.
II. Structural Reform: The Philosophy of Simplification
King V implements major structural changes to prioritize governance outcomes over compliance checklists.
1. Consolidation of Principles
The Code reduces the number of principles from 16/17 in King IV to 12/13 core principles. For example, the new Principle 1 (“The governing body leads ethically and effectively”) synthesizes previous separate domains of leadership role and performance evaluation. This forces boards to view ethical leadership as a continuous process of self-assessment rather than a static state.
2. Deconstructed Format
To enhance clarity, King V replaces the single-document structure of King IV with a modular format:
- Foundational Concepts
- The King V Code (Core principles and practices)
- Glossary
- Disclosure Framework
- Guidance Notes (Supplementary practices)
3. Standardized Disclosure
King V introduces a dedicated Disclosure Framework. While King IV allowed flexible reporting, King V mandates a standardized template to drive Transparency, Consistency, and Comparability (TCC), addressing inconsistencies that previously hindered investor oversight.
III. Enhanced Board Accountability and Independence
King V introduces objective criteria that limit board discretion, thereby enhancing organizational credibility.
The Nine-Year Rule
A definitive change is the “hard cap” on director tenure. Under King V (Principle 5), service beyond nine years may result in an automatic loss of independent status. King IV merely required a “rigorous review” after nine years; King V removes this subjectivity. This mandates proactive succession planning and ensures regular board refreshment to prevent management “capture.”
Expanding the Independence Perimeter
Independence assessments must now extend to “related persons” of the director. This ensures scrutiny of indirect relationships that could impair judgment. Additionally, King V recommends that board committee chairs attend Annual General Meetings (AGMs) and that minutes be released promptly to the public.
IV. Governance of Emerging Risks
King V is highly responsive to modern strategic threats, explicitly integrating technology and social responsibility into fiduciary duties.
1. Business and Human Rights (BHR)
The Code places BHR at the core of corporate responsibility. Organizations must demonstrate due diligence in mitigating adverse impacts on communities to maintain their Social License to Operate (SLO). Climate change is no longer a standalone issue but a cross-cutting concern integrated into ethics, strategy, and risk management.
2. Information, Technology, and AI
Principle 9 expands board oversight to include data, cybersecurity, and emerging technologies. Crucially, King V explicitly addresses Artificial Intelligence (AI) Governance. Boards are responsible for ensuring AI is used ethically, transparently, and with human oversight. This necessitates a review of board competency matrices to include technological expertise.
V. The New Disclosure Regime
The King V Disclosure Framework is the operational heart of the update. Organizations must now use a mandatory template and provide a concluding statement on the realization of governance outcomes. This shifts the focus from justifying what was done (practices) to demonstrating how it achieved the desired results (outcomes).
VI. A New Era of Governance: Implications for Kenya
While King V is a South African code, it serves as a world-class benchmark for Kenya and the broader East African region. Embracing its spirit offers Kenyan firms a competitive advantage in attracting sustainable investment.
1. Integrated Reporting in Kenya
For Kenyan giants like Safaricom or KCB, King V principles encourage reporting beyond financial profits. This includes social impact (digital inclusion) and natural resource management, providing a holistic value proposition to global investors.
2. Professionalizing the Board
The focus on independence and the nine-year rule is a call for the professionalization of Kenyan family-owned or historically concentrated businesses. It encourages a shift from dominant individual influence to diverse, independent oversight.
3. Sustainability and Social Cohesion
King V aligns with Kenya’s challenges, such as climate-resilient supply chains and addressing the pay gap between executives and staff. It moves corporate social responsibility from a peripheral PR activity to a strategic necessity.
VII. Operational Readiness Roadmap
To prepare for the January 2026 effective date, organizations should:
- Conduct Gap Assessments: Map existing frameworks against consolidated principles.
- Update Policies: Revise Board Charters to reflect the nine-year rule and BHR mandates.
- Enhance Competencies: Recruit for or train the board in AI ethics and cybersecurity.
- Align Assurance: Ensure internal audits can capture data required by the new Disclosure Framework.
Conclusion
The King V Code represents a watershed moment in corporate governance. While it retains the “integrated thinking” of its predecessor, it significantly raises the bar for accountability through standardization and the inclusion of emerging risks like AI and Human Rights. For the Kenyan market, it is a clarion call to move from a “tick-box” compliance culture to a principles-based, ethical one. By adopting these standards, Kenyan companies can build resilient, trusted enterprises capable of driving inclusive economic growth in the 21st-century economy.
Summary Comparison Table
| Feature | King IV (2016) | King V (2025) | Significance |
| Principle Count | 16/17 Principles | 12/13 Principles | Reduces fragmentation; reinforces holistic leadership. |
| Independence | 9-year review (Discretionary) | 9-year hard cap (Prescriptive) | Standardizes market expectations; ensures refreshment. |
| AI/Technology | General IT oversight | Explicit AI & Ethical Tech duty | Elevates tech risk to board-level fiduciary duty. |
| Disclosure | Flexible formats | Mandatory Standardized Template | Drives comparability and prevents obfuscation. |
| Sustainability | Six Capitals focus | BHR & Cross-cutting Climate Risk | Embeds human rights and climate into core strategy. |
References
- Institute of Directors in South Africa (IoDSA). (2025). King V Report on Corporate Governance.
- Baker McKenzie. (2025). South Africa: King V Unveiled.
- Webber Wentzel. (2025). Advancing ESG and Business and Human Rights.
- Cliffe Dekker Hofmeyr. (2025). King V Code Published and Effective Date.
The author is the Managing Director of SGA Security Tanzania.
Email: [email protected].
