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King III: Under The Governance Tree

May 2011
Corporate GovernanceMining

Abstract

King III[1] came into effect on 1 March 2010 superseding King II.[2] The drafters of King III were convened by the Institute of Directors of Southern Africa to update governance guidelines in response to changing governance trends worldwide and the new Companies Act, 2008 (No. 71 of 2008), which was not in effect when this paper was written, but came into effect on 1 May 2011. Noting global developments, King III takes an integrated approach to sustainability and recommends the integration of social, environmental and economic issues to achieve integrated reporting and integrated performance. In addition to sustainability, King III endorses other emerging trends, including the increasing prominence of alternative dispute resolution as an element of good governance. King III supports a risk-based approach to internal audit, which requires the determination of the effectiveness of the systems of internal controls. King III introduces the requirement for shareholders to pass a non-binding vote advisory vote on a company’s remuneration policy, addresses business rescue and provides detail on information technology governance. This paper outlines the principal differences between King II and King III and describes emerging governance areas.

Author

Alyson D’Oyley
Company Secretary, African Rainbow Minerals Limited, South Africa

Alyson N D'Oyley, LL.B., LL.M., is the Company Secretary of African Rainbow Minerals Limited (ARM), a niche diversified South African mining company with excellent long-life, low cost operating assets in key commodities. ARM is listed on the JSE Limited. Prior to joining ARM, Ms. D'Oyley was General Counsel & Corporate Secretary at TEAL Exploration & Mining Incorporated, one of the first TSX/JSE dual-listed companies. She was part of the TEAL IPO team. TEAL focused on mineral resources exploration in sub-Saharan Africa. ARM and Vale SA took TEAL private in 2009. Previously, Ms. D'Oyley practised in the Toronto office of Fasken Martineau DuMoulin and at the Toronto office of another national law firm. She was subsequently one of the founding lawyers at FMD's Johannesburg office. Ms. D'Oyley is called to the Bars of British Columbia (1996), Ontario (2000) and New York (2000). She has an LL.B. from UBC, a certificate of international law from the University of Amsterdam and an LL.M. (cum laude) from Temple University. Her areas of expertise include corporate governance, mining, corporate/commercial law, competition and international trade law and cross-border transactions.

Company

African Rainbow Minerals Limited

African Rainbow Minerals is a leading South African diversified mining and minerals company, with world-class long-life, low-cost assets. ARM's business model centres on forging mutually beneficial partnerships with major players in the resource sector. ARM in its current form was created in 2004 to operate, develop, explore and hold significant interests in the South African and African mining industries. By the end of its 2010 financial year, ARM had successfully achieved its 2 x 2010 growth strategy of doubling production volumes in its portfolio of commodities while concurrently sharpening its focus on cost control, expansion into Africa and growing the Company through targeted acquisitions and partnerships.

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