On 26 June 2025, I was asked to speak on a webinar panel hosted by Tangelo and the Investor Relations Society of South Africa. It was an interesting topic: Regulatory landscape – What’s changing in South African Corporate Reporting? My part was to cover the changes in the King V Code Draft and what they mean for how companies approach their corporate reporting. Here’s what I said:
- Overall, the Code has been slimmed down, simplified and updated for, inter alia, changes to the Companies Act and developments in sustainability reporting. There are now 12 principles, down from 16 in the King IV Code.
- The fundamental concepts are the same, although the wording has been finessed and updated. Concepts like being a good corporate citizen, sustainable development and integrated thinking (the latter being the underlying basis of integrated reporting) remain as the undercurrent of the Code.
- Principle 4 deals with reporting: It continues the King Codes understanding of reporting to be to enable stakeholders to make an informed and holistic assessment of how the company creates sustainable value.
- The recommended practice of preparing an integrated report annually remains – except what is new is that the integrated report is explicitly referred to as a “concise communication”. (This is in line with the Integrated Reporting Framework, which defines the report as concise and includes conciseness as one of its guiding principles.)
- On sustainability disclosures, the King V Code Draft calls for disclosure of both financial and impact materiality (i.e. double materiality). Now King IV and King III were inherently based on double materiality calling for consideration and disclosure of a company’s impacts on society and the environment, but this is the time it is explicitly stated. It needed to be said because the ISSB standards are narrower being limited to financial/ investor materiality.
- The King V Code Draft brings in a new disclosure template: A narrative table explaining how the company is implementing, or not, the recommended practices to achieve each principle.
SO, WHAT DOES THIS MEAN FOR COMPANY REPORTING …
- Carry on doing an integrated report, but make sure its concise (if it’s not already concise). The IRC of SA is currently developing an Information Paper on how to achieve a concise integrated report which will be released at the IRC Annual Conference on 22 October 2025 at the JSE and on live webinar.
- Define your corporate reporting suite: This covers the reports you have to do to meet regulatory requirements and the additional voluntary reports and disclosures. Determine the standards and frameworks to be applied in each report, the materiality basis to be used, and the date of issue. The IRC recommends housing all your detailed sustainability disclosures in a standalone sustainability report and positioning the integrated report as your umbrella report showing the overall picture of the company – there are two Information Papers on this on our website.
- On sustainability, determine what you are going to report on and the sustainability standards you will adopt or already use. Remember that the King V Code Draft calls for disclosure of impacts through double materiality.
The final King V Code is expected to be released in September 2025 and the Chair of the King Committee will speak to it at the IRC Annual Conference.