CORPORATE GOVERNANCE
King code not beneath any captain’s notice
Remgro chairman Johann Rupert’s off the mark on the King code recommendations — it was not developed to create nonsense or unnecessary burdens for business, writes Owen Skae
Asked by a shareholder at Remgro’s annual general meeting in December what he thought about the recommendation that listed companies should regularly rotate audit firms, the company’s chairman, Johann Rupert, replied that he was "sick of the King code nonsense". He added that changing audit firms would cause a lot of disruption at companies: "No sooner has an auditor started to understand your business than you have to get rid of him." If Rupert was quoted correctly, he has got the King 4 code completely wrong here. Suggesting it is behind the idea of mandatory firm rotation could not be further from the truth. Part two of the code, entitled Fundamental Concepts, deals with the issue of auditors and audit requirements. It states: "Mandatory rotation of audit firms and mandatory tendering have been introduced in some jurisdictions in an attempt to reinforce auditor independence and audit quality. "King 4 leaves the consideration and decision on whether to implement, either to the aud...
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