In a country plagued by corruption, does corporate governance still matter; or is it our only defence?
Every day brings news of yet another corruption scandal. Case after case, well-placed officials plunder public resources, all while denying wrongdoing and racking up enormous legal costs for taxpayers. Essentially, these corrupt officials are stealing from the average person and denying them the ability to survive. Even more troubling, is that whistle-blowers and ethical professionals, committed to doing the right thing, often fear for their safety and, in some cases, are targeted or even killed.
Corporate governance may not stop corruption in the wider world, but it acts as a vital shield within an organisation. By establishing clear accountability, promoting transparency, and enforcing ethical decision-making, it limits the opportunity for wrongdoing. Strong governance mitigates risks, protects reputation, and maintains stakeholder trust, ensuring the organisation can operate responsibly and sustainably, even when corruption surrounds it.
In essence, good governance is not just a set of rules; it is the organisation’s best defence against chaos and misconduct.
Governance Frameworks: Guiding Ethical, Accountable, and Resilient Organisations
Luckily, in South Africa, we have a wide range of legislation that sets out precisely how organisations should operate, whether in the private or public sector, acts such as the PFMA, MFMA, Companies Act, and many others. And the impressive new King V code, which applies to all private and public sector entities on an ‘apply and explain’ basis. King V now includes a standardised disclosure framework which organisations must use to report their application of King V, including any practices they chose not to adopt (and why).
King V
The underpinning philosophies of King V focus on sustainable development and value creation in the economic, social and environmental context within which they operate. Principle 1 outlines clear expectations for the governing body and its members, regarding Integrity, Competence, Responsibility, Accountability, Fairness and Transparency:
- Integrity: acting in good faith, avoiding conflict of interest, acting ethically.
- Competence: acquiring sufficient working knowledge of the organisation itself, acting with due care, skill and diligence.
- Responsibility: anticipating, preventing or otherwise mitigating the negative impacts and outcomes, capturing opportunities and doing so in a responsible manner and in the long-term best interests of the organisation.
- Accountability: accepting the obligation to explain or answer for the consequences and outcomes of the execution of responsibilities, even those that have been delegated.
- Fairness: taking responsibility for the organisation’s actual and reasonably expected impact and outcomes on the natural environment, society and future generations.
- Transparency: disclosure that accounts for the governance of the organisation and its creation, preservation and erosion of value within its economic, social and environmental context.
Global Internal Audit Standards®
The Institute of Internal Auditors® (IIA®) released the 2024 Global Internal Audit Standards®, (effective from 9thJanuary 2025) which shifts from a rules-based to a principles-based approach, promoting flexibility and adaptability in application. The Standards are available for free download from The IIA®.
Domain II: Ethics and Professionalism
“…Conformance with these principles and standards instills trust in the profession of internal auditing, creates an ethical culture within the internal audit function, and provides the basis for reliance on internal auditors’ work and judgment.”
Principle 1 Demonstrate Integrity: “Internal auditors demonstrate integrity in their work and behavior.
Integrity is behavior characterized by adherence to moral and ethical principles, including demonstrating honesty and the courage to act based on relevant facts, even when facing pressure to do otherwise, or when doing so might create potential adverse personal or organizational consequences. In simple terms, internal auditors are expected to tell the truth and do the right thing, even when it is uncomfortable or difficult.
Integrity is the foundation of the other principles of ethics and professionalism, including objectivity, competency, due professional care, and confidentiality. The integrity of internal auditors is essential to establishing trust and earning respect.”
Enabling and Embedding Governance
There are robust software solutions available to support the implementation and embedding of good governance in organisations.
One such solution is BarnOwl GRC, which makes governance practical and actionable. A centralised system integrating objectives, opportunities, risks, controls and compliance requirements accelerates strategic advantage. BarnOwl GRC streamlines risk management with real-time alerts and reporting, strengthening accountability, transparency, and smarter decision-making. Internal audits, incident management, and control monitoring are all integrated, embedding governance into everyday operations and enabling continuous improvement across the organisation.
BarnOwl GRC: Enabling organisation-wide governance, risk, compliance, and assurance efficiently and cost effectively:
- Integrated risk management: Top down and bottom up approach (integrated strategic, business and process risks).
- Action plans: BarnOwl’s action plans ensure accountability, timely issue resolution, and better governance.
- Risk & Control Self Assessments: BarnOwl’s risk and control self-assessment promotes risk awareness and strengthens internal controls across the organisation.
- Compliance: BarnOwl simplifies regulatory compliance by helping organisations build and manage a complete regulatory universe. With over 100 pre-populated compliance acts including section, heading, provision, verbatim, analysis, consequence and compliance checklist questions, BarnOwl ensures regulatory adherence.
- Key Indicators: BarnOwl’s key indicators provide early warning signals to proactively manage risk and performance.
- Re-assessment early warning: BarnOwl’s built-in risk & control re-assessment, automatically escalates early-warning alerts as the risk landscape changes, enhancing resilience and decision-making.
- Audit Findings: BarnOwl’s audit findings help track issues, drive accountability, and improve control effectiveness.
Ultimately, BarnOwl embeds ownership and accountability for all GRC activities throughout the organisation, leading to:
- Operational effectiveness: improved compliance, reduced risk exposure, and streamlined operations.
- Cultural change and engagement: a strong risk-aware culture and greater employee engagement in governance practices.
- Enhanced business outcomes: enhanced decision-making, business resilience, and sustained regulatory compliance.
- Improved audit and assurance: fewer audit findings, faster remediation, and improved stakeholder confidence.
Download presentation: Harnessing BarnOwl to embed GRC in your organisation and Integrated GRC: Why local is lekker
Conclusion
Corporate governance is the line that holds a country and organisations together. It enforces integrity, limits risk, and protects reputation, proving that ethical conduct and success are inseparable.
Simply put, good governance is not optional; good corporate governance is a building block for national stability, economic growth, and societal trust.
Useful Links
Governance isn’t about compliance, it’s about not losing your business
Global IPPF standards: Increased focus on risk management
Written by:
Jonathan Crisp
Director – BarnOwl GRC and Audit software
About BarnOwl
BarnOwl is a fully integrated risk management, compliance, and audit software solution, underpinned by 25 years of proven performance and trusted by more than 150 blue-chip organisations. Proudly developed and supported locally, BarnOwl delivers world-class functionality backed by dedicated local expertise.
Please see www.barnowl.co.za for more information.