EQUILLORE - MEDIA RELEASE - 16 March 2009

King III Report on Corporate Governance: Lessons for Everyone in SA, not just Big Business

A draft of the King III report on corporate governance was released at the end of February with a significantly different look to it than the previous two reports. This new draft will be presented towards September 2009 and come into effect early in 2010. For the first time, this document will apply to all entities regardless of their nature. The report was released by the Institute of Directors of South Africa.

Mervyn King, the author of the report and chairman of the King Committee on Corporate Governance, told the media that companies are greater agents for change than countries. In many instances, he said, companies. revenue exceeded that of governments.

One of the key changes envisaged by King III is the change in style from an adversarial approach to a more mutually beneficial and cooperative way of dealing with disputes in doing business. Advocate Dumisa Ntsebeza SC, chairman of alternative dispute settlement firm Equillore Ltd, believes the protection of relationships and efficiency should be far more important and he welcomes the King III recommendations on this topic.

Ntsebeza believes King III contains several lessons, not only for corporates but for ordinary South Africans as well. According to him, the traditional African approach of talking through problems instead of fighting about it has, through the centuries, shown to be the option with the most long term benefit. These lessons, he explains, have been implemented for some time already at Equillore. The firm enables dispute settlement by pro-actively managing the life-cycle of a dispute within pre-determined timelines through various services that include conciliation, mediation and arbitration.

Instead of fighting each other in court when problems crop up, companies should look at a different way of resolving disputes., says Ntsebeza. .Litigation is expensive and court cases very hostile. Sitting parties down around a table to discuss their disputes, in the company of an experienced and trained neutral mediator, can potentially provide for more mutually beneficial outcomes where business relationships could be salvaged.

Ntsebeza believes boards of companies should pay special heed to sections of King III which deals with the pro-active handling of disputes and how this would benefit the company.s bottom line. King III requires boards to resolve internal and external disputes effectively, expeditiously and efficiently.

Another fan of the King III report is change provocateur Mike Freedman, partner at the research and development think-tank Freedthinkers: "People are looking more critically at companies they do business with; if for instance you are adversarial with a supplier and friendly to me, I will see you as two-faced and have diminished trust. The speed and pervasiveness of modern communications means there is no pace to hide.

"If you value your reputation you do not win a war and lose the peace."