More than this, Massmart believes that sustainable and effective corporate governance is best demonstrated through a consistent pattern of doing the right thing regardless of the circumstances.
The primary South African corporate governance framework is the King Report on Governance for South Africa, 2009 and King Code of Governance Principles (King III), which forms the backbone to Massmart’s own corporate governance framework; in addition Massmart applies high ethical standards to its operating environment as reflected in the Group’s Code of Ethical Conduct.
Massmart believes that these guides to corporate decision making are essential for any governance framework to achieve desired outcomes consistent with our Company values. In addition to this corporate governance framework, the Group is committed to complying with all legislation, regulations and best practices relevant to our business, in every country where we conduct business. A register documenting the assessment of all 75 principles of King III is available here.
The purpose of King III
The philosophy of King III revolves around leadership, sustainability and corporate citizenship. To facilitate an understanding of the thought process, debate and changes in King III, the following key aspects are highlighted:
- Good governance is essentially about effective leadership. Leaders should rise to the challenges of modern governance. Such leadership is characterised by the ethical values of responsibility, accountability, fairness and transparency and based on moral duties that find expression in the concept of Ubuntu. Responsible leaders direct company strategies and operations with a view to achieving sustainable economic, social and environmental performance.
- Sustainability is the primary moral and economic imperative of the 21st century. 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 should be understood by decision-makers. Most importantly, current incremental changes towards sustainability are not sufficient – we need a fundamental shift in the way companies and directors act and organise themselves.
- The concept of corporate citizenship which flows from the fact that the company is a person and should operate in a sustainable manner. Sustainability considerations are rooted in the South African Constitution which is the basic social contract that South Africans have entered into. The Constitution imposes responsibilities upon individuals and juristic persons for the realisation of the most fundamental rights.