Companies seeking to list on South Africa’s Johannesburg Securities Exchange (JSE) will now have to comply with the King IV corporate governance codes (King IV), which was published last year, as part of amended listing requirements. Companies already listed must make disclosures in relation to the King IV rules from 1st October.

The new listing rules include the requirement for companies to disclose a race diversity policy and the publication of a compliance report pursuant to the Broad-Based Black Economic Empowerment Amendment Act, 2013.

Vanessa Van Copenhagen director at  law firm ENSafrica writing in an online legal update said: ” King IV follows an “apply-and-explain” approach in that a company is required to explain (in the form of a narrative account) which recommended practices have been implemented and how these achieve or give effect to a King IV principle, to reveal how judgement was exercised when considering the recommended practices.”

 

Requirements under King IV include the need for the Board or nomination committee of an issuer to have a policy on the promotion of race diversity at board level, in addition to a gender diversity policy and must disclose in its annual report how it is apply this policy; annual non-binding votes on both the company’s remuneration policy and also its implementation report; companies must record the measures that the board commits to take if either the remuneration policy or the implementation report, or both, are voted against by 25% or more of the votes exercised and if either the remuneration policy or the implementation report, or both, are voted against by shareholders exercising 25% or more of the voting rights exercised, the issuer must, in its voting results announcement, provide for (i) an invitation to dissenting shareholders to engage with the issuer; and (ii) the manner and timing of such engagement.

Meanwhile, the Hong Kong Stock Exchange has released a consultation paper on proposals to widen its appeal to companies seeking a listing. The HSE is aiming to adapt its regime so that it can accommodate pre-profit companies; companies with non-standard governance features; and mainland Chinese companies that wish to secondarily list in Hong Kong.

Last Updated: 23 June 2017