Corporate governance in South Africa: an investigation and comparison of King II with internationally developed systems, specifically sarnes oxley: their impact on South African based multinationals with specific reference to value added and overall cost

Abstract

Corporate Governance systems are generally designed to meet the specific requirements of businesses operating in a particular country or region. The increasing globalisation of business, and in particular the rise of companies based in developing economies, has resulted in a greater level of integration between different Corporate Governance systems and regimes. This research is a systematic investigation of the interface and integration between the fundamentally insider system of governance prevalent in South Africa and the intrinsically outsider system being implemented in the United States as a result of the promulgation of the Sarbanes-Oxley (SOX) Act. Through a series of qualitative interviews a conclusion is drawn as to the efficacy of the two different approaches. Specific emphasis is placed on the cost of implementation of SOX versus the value that the regime adds to the governance activities of dual listed South African based multi•national companies registered on U.S. stock exchanges who are legally obligated to report on elements of the SOX legislation. A series of conclusions are drawn from the themes arising from the research and recommendations offered for further consideration of the issue by business and academics. Opportunities for further research are also identified.