Aquilla Informer: Issue 2010/26
Business (Key principals of the King III)
The Soccer world Cup is midway through the elimination phase and it seems that a few favorites might not make the cut to go through to the next round. Our own team also amongst those unless they come up with a miracle and win France with more than 5 goals.
We start our discussion of the King III report on all forms of business irrespective of the registration method of the organisation. This implies that Listed, unlisted, CC's. NGO's Churches etc will all have to adopt the principles in some form or another or face explanation to why they have not adopted these principles.
If you have not done so already, please use this opportunity to make use of our special deal on the Open source Turbo Cash Accounting software, running until the end of June 2010.
Thank you for doing business with us. By trusting us to take care of the things you do not have the time for, you can spend your time focused on what you do best, your business.
KEY PRINCIPLES OF THE KING III (Part2)
King III has broadened the scope of corporate governance in South Africa with its core philosophy revolving around leadership, sustainability and corporate citizenship.
These key principles are given prominence:
King III has opted for an ‘apply or explain’ governance framework. Where the board believes it to be in the best interests of the company, it can adopt a practice different from that recommended in King III, but must explain it. Explaining the different practice adopted and an acceptable reason for it, results in consistency with King III principles.
Good governance is essentially about effective leadership. Leaders need to define strategy, provide direction and establish the ethics and values that will influence and guide practices and behaviour with regard to sustainability performance.
Sustainability is now the primary moral and economic imperative and it is one of the most important sources of both opportunities and risks for businesses. Nature, society, and business are interconnected in complex ways that need to be understood by decision makers. Incremental changes towards sustainability are not sufficient – we need a fundamental shift in the way companies and directors act and organise themselves.
Innovation, fairness, and collaboration are key aspects of any transition to sustainability – innovation provides new ways of doing things, including profitable responses to sustainability. Fairness is vital because social injustice is unsustainable and collaboration is often a prerequisite for large-scale change.
Social transformation and redress is important and needs to be integrated within the broader transition to sustainability. Integrating sustainability and social transformation in a strategic and coherent manner will give rise to greater opportunities, efficiencies, and benefits, for both the company and society.
King II required companies to implement sustainability reporting as a core aspect of corporate governance. Since 2002, sustainability reporting has become a widely accepted practice and South Africa is an emerging market leader in the field. However, sustainability reporting is in need of renewal in order to respond to:
The lingering trust deficit among civil society of the intentions and practices of big business
Concerns among business decision makers that sustainability reporting is not fulfilling their expectations in a cost-effective manner.
The framework recommended by King III is principles-based and there is no ‘one size fits all’ solution. Entities are encouraged to tailor the principles of the Code as appropriate to the size, nature and complexity of their organisation. This is good news for companies in South Africa as it avoids some of the pitfalls seen in the United States where a ‘one size fits all’ approach was initially adopted.
In contrast to King I and King II, King III applies to all entities regardless of the manner and form of incorporation or establishment. Principles are drafted on the basis that, if they are adhered to, any entity would have practiced good governance. It is recommended that all entities disclose which principles and/or practices they have decided not to apply or explain. This level of disclosure will allow stakeholders to comment on and challenge the board to improve the level of governance within an organisation.
Some of the requirements introduced by King III include:
In the next newsletter I will look at chapter one that deals with Ethical leadership and Corporate Citizenship.
The need for an annual integrated report that focuses on the impact of the organisation in the economic, environmental and social spheres
A statement by the audit committee to the board and shareholders on the effectiveness of internal financial controls to be included in the integrated report
The consideration of the strategic role of IT and its importance from a governance perspective
The positioning of internal audit as a strategic function that conducts a risk-based internal audit and provides a written assessment of the company’s system of internal control, including internal financial controls
The governance of risk through formal risk management processes.
This week we have a taxation question from one of our tax clients.
How long should I keep my Tax records?
Tax records should not be destroyed . SARS cab still decide to issue queries at a later date. and not having records can be very costly. It is advisable to keep all tax records for a period of five years from the date of the particular assessment.
Keep in mind that certain company records and financial statements should be kept for the life time of the organisation.
For the next month until end of June 2010 we are offering readers the following:
1. A complete, fully functional free accounting system called TurboCash 22.214.171.124
2. Customised set of books
3. Onsite training in Gauteng (only). I will consider other areas if 3 -5 five business people are willing to combine their training over two days. Contact me for more information.
4. Two hours electronic and telephonic support valid for 6 months
5. Training Manual
6. CD including latest version of TurboCash and other Open source Software.
All of this for a mere R2000.00, which amounts to a saving of R3500.00. If you want to run TurboCash on a network or use it as a Point of Sale (POS) you are welcome to contact us for a free quotation.
We are proud to introduce to our partners a unique offering: OCSACare. This is a low cost product you can introduce as a benefit to your staff and volunteers, with tremendous benefits to your organisation.
It is an occupational health solution designed for the South African labour market to keep employees who were previously excluded from any form of private healthcare, healthy and productive.
· Premium, private, day-to-day healthcare through the private medical practitioners of the CareCross Health Group
· A national network of GP’s, Radiologists, Pathologists, Dentists and Optometrists
· Affordable healthcare.
· Quality medical care for staff, close to the work place
· All medication, X-rays, blood tests, standard dentistry and optometry
· Over 2000 doctors, 1800 optometrists and 1800 dentists in the network
· No more queuing at state hospitals and clinics
· Healthier, happier and more loyal work force
· Lower Staff turnover
· Credible sick notes from private doctors
· Lower absenteeism
The Gold Package:
For only R190.00 per employee per month it provides your employees with the option to visit any CareCross Doctor, Dentist or Optometrist without co-payments for these services. This option is available to groups of 10 or more.
The Silver Package:
For only R160.00 per employee per month it provides your employees with the option to visit any CareCross Doctor, without any co-payments for this service. This option is available for individuals and groups fewer than 10.
Thank you for sending in your questions. Please continue so, and we will answer them as best possible in our Q&A section.
Have a great week.
Aquilla Informer Team