Taking the Helm with Prof Mervyn King

Chairing for long-term value

  • 25 September 2025

This event focuses on the pivotal role of a chair in steering an organisation
toward sustainable success.

 

It delves into the responsibilities of chairing, highlighting the importance of strategic decision-making, effective governance, and fostering collaboration within the board. We will discuss how chairs can drive long-term value by balancing immediate organizational needs with future growth goals, ensuring alignment with broader mission and vision.

 

This session provides valuable insights for current and aspiring chairs, offering practical guidance on navigating challenges and leading with purpose to achieve lasting organisational impact.

In Brief:

Background Information

The event explores the evolving landscape of corporate governance and how chairs can adapt to shifting market dynamics, regulatory changes, and stakeholder expectations.

 

With a focus on long-term value, the session will cover best practices for chairing meetings, managing board dynamics, and building a cohesive, high-performing board. Emphasizing the importance of effective communication and transparency, the webinar equips chairs with tools to foster trust and ensure that the board operates efficiently and collaboratively.

 

By prioritizing long-term thinking, chairs can steer organisations towards resilience and ethical practices while ensuring that they remain adaptable and agile in a rapidly changing world. 

Short Explainer

Frequently Asked Questions

The New Chair’s Playbook for Long-Term Success

The initial actions of a new board chair are strategically paramount. These first steps are not merely procedural; they are foundational for embedding a culture of sustainability and long-term value creation into the company’s core DNA. They serve as a comprehensive diagnostic to align the board, assess the business model, and set a clear course for the future.

Professor King prescribes a rigorous diagnostic process that a new chair must undertake to understand the company’s true position and potential. These actions are designed to move beyond surface-level analysis and probe the fundamental health and direction of the organization.
  1. Analyze the Business Model: The first imperative is to assess whether the company’s business model is built upon the three essential pillars of sustainable development: the economy, society, and the environment. A model that ignores or externalizes its impact on any of these pillars is inherently unsustainable and requires immediate strategic attention.
  2. Define the Long-Term Goal: The chair must scrutinize the company’s ultimate objective. Is it merely focused on short-term profit, or does it have a forward-looking, sustainable purpose? Professor King cites the example of Shell, whose stated long-term goal is “to be the most sustainable energy provider in the world.” This type of aspirational, long-term goal reorients the entire organization toward a managed and planned transition, rather than a reactive defense of legacy operations.
  3. Assess the Board’s Mindset: It is crucial to determine if the board practices integrated thinking or if it remains siloed in its approach. A strong positive indicator of an integrated mindset is the production of an integrated report, which, as Professor King notes, inherently drives the board to think on an integrated basis, a practice that research has shown leads to more effective governance and improved financial performance.
  4. Identify External Pressures and Internal Gaps: Finally, the chair must probe a range of specific external and internal factors. This includes understanding the impact of geopolitical tensions, identifying critical skill shortages that could hinder progress, and assessing the company’s impact and dependency on natural assets and biodiversity.
  5. Evaluate Governance Outcomes: A chair must investigate whether the company has achieved the critical outcomes of good governance:
  • Effective Leadership: Have the directors accepted their role as “guardians of the company’s assets and its business affairs,” treating the company with great care?
  • Adequate Controls: Are the company’s control systems effective and robust, potentially leveraging modern approaches like integrated assurance?
  • A Strong Reputation as a Good Corporate Citizen: Does the company enjoy a high level of trust and confidence within its community, demonstrating that it is perceived as a positive force?
These initial diagnostic actions provide the essential foundation upon which a chair can begin to steer the company toward its long-term goals.

The Defining Roles of the Board and Management

A clear and unambiguous delineation of roles between the board and management is the bedrock of effective corporate governance. Ambiguity in this area invariably leads to strategic drift, operational inefficiency, and a breakdown in accountability, making this distinction a critical point of focus for any high-performing organization.

 
Professor King distills this complex relationship into a powerful and direct principle: “Boards think, and management does.”
 
This simple statement outlines two distinct but complementary functions that are essential for the company’s health and success.
  • The Board’s Role: The board is fundamentally an “oversight body and an approval body.” Its primary purpose is to apply its “collective mind” to make strategic business judgment calls that are in the long-term best interest of the company. It is the ultimate authority, and its voice—expressed through decisions and, most notably, the integrated report—is the true “voice of the company.” The board does not manage day-to-day operations; it sets the strategic direction, oversees its implementation, and approves key documents and decisions.
  • Management’s Role: The Chief Executive Officer (CEO) is the “leader of the management team implementing the decisions of the board.” Management’s function is to execute the strategy approved by the board, run the daily operations of the business, and prepare the detailed reports, such as financial statements and sustainability reports, that the board then scrutinizes, questions, and ultimately approves.
 
This clear separation ensures that strategic oversight is not conflated with operational execution, allowing each body to perform its unique and critical function effectively.

The True North of Board Accountability

One of the most common and dangerous misconceptions in corporate governance revolves around the question of board accountability. Understanding precisely where a director’s fiduciary duty lies is not an academic exercise; it is the foundational principle that dictates board conduct and serves as the primary defense against claims of negligence or breach of duty.

 

Professor King’s answer is unequivocal and legally precise: a board’s duty of care is owed exclusively to the company itself, and absolutely not to the shareholders or any other stakeholder group.
 
The implications of this principle are profound and have been tested in court:
  • The Steinhoff Case: Professor King cites the landmark Steinhoff case in South Africa, where shareholders who attempted to sue the directors directly for their losses failed. The court affirmed the longstanding legal principle that the directors did not owe them a direct duty of care; that duty was owed to the company, Steinhoff.
  • Directors as Guardians: This principle establishes directors as the “guardians of the company’s assets and its business affairs.” They are legally bound to treat the company with the same great care and diligence one would afford a young child under their protection, always acting in its long-term best interest.
  • The Shareholder’s Position: The “concomitant” of shareholders having no duty to the company is that they are positioned at the very back of the queue when the company fails, after all creditors are satisfied. This legal reality underscores that their relationship is with the company as an investment, not a direct fiduciary link with its directors.
 
This legal clarity is the anchor of corporate governance, ensuring that board decisions are made to preserve the long-term health of the corporate entity itself.

The Proven Impact of Integrated Reporting

Integrated reporting is far more than a compliance document; it is a powerful catalyst for a fundamental shift in corporate mindset. It serves as the primary tool for translating the abstract principles of sustainable governance into tangible actions and measurable performance improvements, creating a virtuous cycle of better thinking, better performance, and better communication.

 

Professor King gives a firm, evidence-based affirmation of integrated reporting’s positive impact. He points to research and real-world results that demonstrate its effectiveness:
  • Improved Financial Performance: Research has consistently shown that companies that practice integrated thinking and adopt integrated reporting see their financial bottom line improve.
  • Enhanced Reputation: These same companies experience a corresponding improvement in their reputation, building greater trust and confidence within the communities and markets where they operate.
  • Increased Adoption: The value of this approach is reflected in its growing adoption. Even without active promotion by the IFRS (which now owns the framework), there has been a 20% global increase in the number of companies producing integrated reports.
The reason for this success lies in its core function. Integrated reporting forces a board to think on an integrated basis, which mirrors the reality of how a company actually operates. As Professor King states, “as you operate, so you should report.”
 
Crucially, it is designed to communicate the board’s holistic perspective in a “clear, concise, and understandable manner” to all stakeholders. This makes complex information about value creation accessible beyond financial analysts, empowering a broader audience to understand the company’s performance, risks, and long-term strategy.

Moving Beyond Shareholder Primacy

The historical doctrine of shareholder primacy—the idea that a company’s sole purpose is to maximize shareholder profit—was a dominant force in 20th-century business. However, it is a model that is no longer fit for purpose in the 21st century. Its evolution is not a mere trend but a necessary doctrinal correction to address the systemic risks and profound externalities it imposed on society and the environment.

Professor King delivers a sharp critique of the doctrine famously championed by Professor Milton Friedman, which held that the sole purpose of a company was to increase its profits.
 
He identifies a core, catastrophic flaw in this logic: The dramatic increase in corporate profits during the 20th century was “actually subsidized by society and the environment,” a reality that directly led to the “degradation of planet Earth.”
 
This narrow view ignored the interconnected system in which every business operates. The modern, integrated reality that has replaced this outdated doctrine is built on a simple, undeniable fact: “Business is at the junction of the economy, society, and the environment. And that will never change.”
 
Professor King asserts that the rise of integrated thinking has effectively “stormed that Bastille,” establishing a new and more resilient paradigm. This modern approach recognizes that a company’s true, long-term health depends on creating value sustainably, not on maximizing short-term profit at any and all external cost.

The High Bar for Suing Directors

Shareholders, creditors, and other stakeholders who believe a company’s directors have caused it harm face significant legal hurdles to seeking recourse. The legal framework is intentionally designed to protect directors’ ability to make good-faith business judgments without the constant threat of frivolous litigation. This makes direct legal challenges against directors for a breach of their duties exceptionally difficult to mount and win.

 

Professor King explains the complex and challenging process known as a “derivative action,” which stakeholders must follow.
  1. Direct Lawsuits are Impermissible: First and foremost, stakeholders such as banks or shareholders cannot sue directors directly for a breach of their duty of care. This is because, as established, that duty is owed to the company, not to them.
  2. The “Derivative” Path: The legally prescribed path requires the stakeholder to first ask the company to sue the directors. If the board—acting as the mind of the company—refuses, the stakeholder’s next step is to petition a court for permission to sue the directors on behalf of the company.
  3. The Risks and Realities: This process is fraught with deterrents. Professor King describes it as “problematic,” noting that it can cost millions in legal fees with no guarantee of success. Even if the lawsuit is successful, the recovered funds go directly to the company, not to the plaintiff who initiated the action. A shareholder who funded the litigation would find themselves, once again, at the “back of the queue” after all of the company’s creditors are paid from the recovered assets.
 
This high legal bar reinforces the principle that the board’s primary obligation is to the corporate entity, and recourse for perceived failures must follow a path that centers the company’s interests.

The Ultimate Test of Materiality

Materiality is the board’s paramount disclosure principle, a legal and fiduciary duty that transcends mere compliance with any single reporting standard. While frameworks from bodies like the International Sustainability Standards Board (ISSB) provide crucial guidance, a board’s ultimate responsibility is to provide stakeholders with a complete and honest picture of all information that could influence their decisions, not just the information prescribed by a specific framework.

 

Professor King articulates the core legal definition of materiality, which serves as the ultimate test for what a board must disclose. Information is legally material if it is something which, “as a matter of probability, could influence the mind of the user”—for example, a creditor deciding whether to continue granting credit to the company.
 
The implication of this principle is critical for every director to understand:
  • If an issue is material according to this legal definition, the board has an absolute obligation to report it. This duty exists even if the specific reporting standard the company follows—such as those from the ISSB, which are primarily focused on information impacting financial outcomes—does not explicitly require its disclosure.
  • Failure to disclose such material information is not a minor oversight. It can expose directors to both civil and criminal liability. This duty of accountability to report all material information is absolute and serves as a foundational component of a director’s legal obligations.

The Two Hats of an Executive Director

Executive directors occupy a unique and challenging position within the corporate structure. These individuals must consciously navigate two distinct sets of duties: those of a senior manager and those of a board member. The ability to differentiate between their operational and governance roles is crucial for their personal integrity, their legal standing, and the overall health of the company’s governance.

 

Professor King uses a simple yet powerful “hats” analogy to explain this critical duality. An executive director must be acutely aware of which hat they are wearing at any given moment, as each comes with a distinct set of legal duties and responsibilities.
  • The Management Hat: When an individual is acting in their executive capacity—for example, as a Chief Information Officer performing their daily duties—their responsibilities are defined by their specific employment contract. If they fail to meet these obligations and cause harm to the company, the company can sue them for a breach of these contractual terms.
  • The Director Hat: When that same individual walks into the boardroom for a board meeting, they must metaphorically “leave your management cap on your desk” and put on their director’s hat. In this capacity, their actions are no longer governed by their employment contract but by the overarching statutory duties of care, skill, and diligence owed to the company as a whole, as defined by corporate law (e.g., the Companies Act).
 
This deliberate separation of roles is essential for maintaining the integrity of the board’s oversight function and ensuring that all directors, executive and non-executive alike, are governed by the same high fiduciary standard when making collective decisions.

Our Guests

30/03/2021 Wits Business school
Carolynn Chalmers 620px

Glossary of Terms

Board (Role of)
An oversight and approval body responsible for applying collective, original intellectual thinking to make business judgment calls in the long-term best interest of the company’s health. The board is the ultimate authority and “voice of the company.”
Compliance Panic
A state of confusion and anxiety experienced by companies, particularly smaller ones, due to the proliferation of different and potentially conflicting sustainability reporting standards (e.g., ISSB, ESRS, GRI), making it unclear which standards to follow.
Derivative Lawsuit
A legal action where a stakeholder (such as a shareholder or creditor) petitions the court to sue the directors on behalf of the company. This is necessary because directors owe their legal duty of care to the company itself, not directly to stakeholders.
Duty of Care
The legal and fiduciary responsibility that directors have to act in the best long-term interests of the health of the company. This duty is owed to the company as a legal entity, not to shareholders or other parties.
Guardians (of the Company)
A term describing the role of directors, who are entrusted with protecting the company’s assets and business affairs with great care, similar to how a guardian would treat a young child.
Hybrid Internal Audit
An audit model where a company’s internal audit executive works in partnership with a major accounting firm (one of the “big six”) to conduct internal audits. This enhances quality, reduces costs, and provides access to advanced technology like AI.
Integrated Report (IR)
A concise communication prepared by the board that explains how an organization’s strategy, governance, performance, and prospects, in the context of its external environment, lead to the creation of value. It is designed to be clear, concise, and understandable to all stakeholders.
Integrated Thinking
A management and governance approach where a board actively considers the relationships between its various operating units and the capitals (financial, social, environmental, etc.) that the organization uses and affects. It is the prerequisite for integrated reporting.
Interoperability
A term used in corporate reporting to describe the effort to connect or align different reporting standards (such as ISSB and ESRS) so that a company can report material information required by one standard while complying with another.
ISSB (International Sustainability Standards Board)
A standard-setting body under the IFRS Foundation that develops sustainability disclosure standards focused on meeting the information needs of investors and addressing issues with financial outcomes.
Materiality
The legal principle that defines information as material if, as a matter of probability, it could influence the mind of a user (e.g., a creditor or investor) in their decision-making. Boards have a duty to disclose all material information, regardless of whether a specific reporting standard requires it.
Shareholder Primacy
The 20th-century theory, famously associated with Milton Friedman, that the sole purpose of a corporation is to maximize profits for its shareholders. This view is now seen as outdated, as it often led to profits being subsidized by society and the environment.
Sustainable Development Pillars
The three fundamental pillars—the economy, society, and the environment—that a business must consider in an integrated manner to achieve long-term success and sustainable value creation.
Two-Tier Board
A corporate governance structure, common in some European jurisdictions, that consists of two separate boards: an Executive Board (management) that handles operations, and a Supervisory Board (non-executives) that provides strategic oversight.
Value Creation
The outcome of a company’s activities that increases, decreases, or transforms the value of its capitals over time. Good governance aims for value creation in a sustainable manner, considering economic, social, and environmental factors.

Prof. Mervyn King

Patron, Good Governance Academy

Mervyn King is a Senior Counsel, former Judge of the Supreme Court of South Africa, and designated Chartered Director (South Africa). He is Professor Extraordinaire at the University of South Africa, Honorary Professor at the Universities of Pretoria and Cape Town, and a Visiting Professor at Rhodes University. He has honorary Doctorates from Wits University and Stellenbosch University in South Africa, Leeds University in the UK, and Deakin University in Australia.

 

Mervyn is honorary fellow of the Institute of Chartered Accountants of England and Wales; the Institute of Internal Auditors of the UK; the Chartered Institute of Management Accountants; the Certified Public Accountants of Australia; the Chartered Institute of Public Relations of the UK, and the Chartered Secretaries and Administrators.

 

Mervyn is Chair Emeritus of the King Committee on Corporate Governance in South Africa, as well as of the Value Reporting Foundation (incorporating the International Integrated Reporting Council and SASB) and the Global Reporting Initiative (GRI). He has received Lifetime Achievement Awards for promoting quality corporate governance globally, from several institutions.

 

Mervyn chairs the Good Law Foundation and has chaired the United Nations Committee of Eminent persons on Governance and Oversight. He is a member of the Private Sector Advisory Group to the World Bank on Corporate Governance and of the ICC Court of Arbitration in Paris. Mervyn currently chairs the African Integrated Reporting Council and the Integrated Reporting Committee of South Africa and is Patron of the Good Governance Academy.

 

Mervyn has been a chair, director and chief executive of several companies listed on the London, Luxembourg and Johannesburg Stock Exchanges. He has consulted, advised and spoken on legal, business, advertising, sustainability and corporate governance issues in over 60 countries and has received many awards from international bodies around the world including the World Federation of Stock Exchanges and the International Federation of Accountants.

 

He is the author of many books on governance, sustainability and reporting, the latest being “The Healthy Company.”

Carolynn Chalmers

Chief Executive Officer, Good Governance Academy

Carolynn Chalmers is the Chief Executive Officer of Professor Mervyn King’s Good Governance Academy and its initiative, The ESG Exchange. She has edited two international standards: ISO 37000:2021 – Governance of organizations – Guidance and its associated Governance Maturity Model, ISO 37004:2023.

 

Carolynn makes corporate dreams come true, assisting leaders and leadership teams in how to create value for their organisations. She makes use of her expertise and experience in corporate governance, organizational strategy, Digital Transformation, and IT to do so.

 

Carolynn is an Independent Committee Member of South Africa’s largest private Pension Fund, the Eskom Pension and Provident Fund, and recently retired as Independent Committee member of several board committees for the Government Employee Medical Scheme. Carolynn has extensive management, assurance and governance experience and has held various Executive roles for international, listed, private and public organisations across many industries.

 

Carolynn is best known for her successes in establishing governance frameworks, and designing and the leading large, complex initiatives that can result. She attributes this success to the application of good governance principles. She shares her insights on her 2 LinkedIn Groups – Applying King IV and Corporate Governance Institute. 

Terms and Conditions

  • The Good Governance Academy nor any of its agents or representatives shall be liable for any damage, loss or liability arising from the use or inability to use this web site or the services or content provided from and through this web site.
  • This web site is supplied on an “as is” basis and has not been compiled or supplied to meet the user’s individual requirements. It is the sole responsibility of the user to satisfy itself prior to entering into this agreement with The Good Governance Academy that the service available from and through this web site will meet the user’s individual requirements and be compatible with the user’s hardware and/or software.
  • Information, ideas and opinions expressed on this site should not be regarded as professional advice or the official opinion of The Good Governance Academy and users are encouraged to consult professional advice before taking any course of action related to information, ideas or opinions expressed on this site.
  • When this site collects private information from users, such information shall not be disclosed to any third party unless agreed upon between the user and The Good Governance Academy.
  • The Good Governance Academy may, in its sole discretion, change this agreement or any part thereof at any time without notice.

Privacy Policy

Link to the policy: GGA Privacy Policy 2021

The Good Governance Academy (“GGA”) strives for transparency and trust when it comes to protecting your privacy and we aim to clearly explain how we collect and process your information.

It’s important to us that you should enjoy using our products, services and website(s) without compromising your privacy in any way. The policy outlines how we collect and use different types of personal and behavioural information, and the reasons for doing so. You have the right to access, change or delete your personal information at any time and you can find out more about this and your rights by contacting the GGA, clicking on the “CONTACT” menu item or using the details at the bottom of the page.

The policy applies to “users” (or “you”) of the GGA website(s) or any GGA product or service; that is anyone attending, registering or interacting with any product or service from the GGA. This includes event attendees, participants, registrants, website users, app users and the like.

Our policies are updated from time-to-time. Please refer back regularly to keep yourself updated.

Search

Dr Lindie Grebe

Senior Lecturer, College of Accounting Sciences, University of South Africa

Dr Grebe is a chartered accountant and senior lecturer at the University of South Africa (Unisa). 

 

She teaches postgraduate accounting sciences through blended learning using technology in distance education, and through face-to-face study schools throughout South Africa. During her employment at Unisa, she also acted as Coordinator: Master’s and Doctoral Degrees for the College of Accounting Sciences (CAS), chairperson of the research ethics committee and chairperson of the Gauteng North Region of the Southern African Accounting Association (SAAA). 

 

Before joining Unisa as academic, she gained ten years’ experience in audit practice and in commerce.