The New King V Code of Corporate Governance for South Africa 2025: A Benchmark and Lessons for Nigeria
The release of the King V Report in South Africa marks a significant step forward in the global corporate governance landscape. For Nigeria, which follows the Nigerian Code of Corporate Governance (NCCG) 2018, King V offers a forward-looking reflection. It emphasizes both the maturity of governance thinking and the practical steps needed to build resilient, sustainable, and legitimate enterprises in a developing economy. It focuses on outcomes, a direction foretold in the 2020 book, Outcomes-based Governance: A Modern Approach to Corporate Governance, by Professor Mervyn King SC and Professor Fabian Ajogwu, SAN
King V is not merely an update; it signifies a philosophical shift from compliance to outcomes- based governance. Here are the main lessons and implications for Nigerian regulators, boards, and stakeholders.
Lesson 1: Transition from “Apply and Explain” to “Apply, Explain, and PROVE the Outcome”.
King V Approach: The code requires organisations to not only apply the principles and explain their practices but also provide a conclusive statement on whether this has resulted in four specific governance outcomes: Ethical Culture, Performance and Value Creation, Conformance and Prudent Control, and Legitimacy.
Lesson for Nigeria: The NCCG 2018 also emphasises “apply and explain.” However, King V raises the standard by requiring proof of results. Nigerian regulators, such as the Financial Reporting Council of Nigeria (FRCN), could consider future versions of the code that mandate a similar “outcomes statement” in their reports. This would encourage Nigerian companies to move beyond narrative reporting and demonstrate the tangible impact of their governance frameworks, directly tackling issues such as reputational damage and public trust deficit.
Lesson 2: Embed a Foundational Cultural Philosophy
King V Approach: King V explicitly adopts the Ubuntu-Botho philosophy (“I am because we are”) as a bedrock for stakeholder inclusivity and responsible corporate citizenship.
Lesson for Nigeria: Nigeria has a rich mix of cultural philosophies that emphasise integrity, honour, and social responsibility. The Nigerian code is primarily secular and principles-based. Introducing a relatable, indigenous philosophy could provide a strong, culturally meaningful ethical guide for Nigerian directors, making governance principles feel less foreign and more rooted.
Lesson 3: Make ESG and Sustainable Value Creation a Board-Level Strategic Imperative
King V Approach: Environmental, Social and Governance (ESG) considerations are integral to strategy. Principle 3 requires the board to ensure the business model delivers sustainable value within its economic, social, and environmental context. Principle 2 mandates oversight of environmental impacts, climate resilience, and social equity.
Lesson for Nigeria: While the NCCG 2018 mentions sustainability, King V integrates it into the core purpose of the organisation. For Nigeria, grappling with climate change, resource depletion, and social inequality, this is a vital lesson. Nigerian boards must be encouraged to see ESG risks (such as desertification in the North and pollution in the Niger Delta) as existential threats and strategic opportunities, moving beyond charitable CSR to integrated, sustainable strategies.
Lesson 4: Formalise and Elevate Technology & AI Governance
King V Approach: Principle 10 focuses on managing data, information, and technology. It sets clear expectations for cybersecurity, data privacy, and, importantly, the ethical governance of Artificial Intelligence, which demands human oversight and fairness.
Lesson for Nigeria: As Nigeria undergoes a rapid digital transformation with a rapidly expanding fintech sector, the absence of explicit technological governance in the current code is a gap. King V provides a ready-made framework. Nigerian regulators and boards must urgently address the governance of digital assets, customer data, and the ethical use of AI to foster innovation while managing risks and building digital trust.
Lesson 5: Define and Demand Specific Leadership Characteristics
King V Approach: Principle 1 outlines six essential qualities for directors: Integrity, Competence, Responsibility, Accountability, Fairness, and Transparency. These are detailed through specific behaviours and form part of the formal board evaluation.
Lesson for Nigeria: This framework offers a robust tool for board nomination and evaluation committees in Nigeria. It advances beyond simply checking a box for “financial expert” to evaluating a director’s overall ability and ethical integrity. Implementing a similar detailed framework could significantly enhance board quality and dynamics, helping to address issues such as cronyism and passive directorship.
Lesson 6: Strengthen Stakeholder Inclusivity with Formal Processes
King V Approach: Principle 13 requires a “stakeholder-inclusive approach” with formal methodologies for identifying stakeholder interests and analysing the associated risks and opportunities.
Lesson for Nigeria: Many Nigerian companies, especially in the energy sector, experience strained relationships with communities, employees, and regulators. King V demonstrates that stakeholder management is not merely a public relations function but a fundamental governance and risk mitigation strategy. Nigerian companies that actively develop these processes will gain greater social license to operate and ensure long-term stability.
A Comparative Snapshot: King V vs. NCCG 2018
Conclusion: A Call to Action
The King V Code presents a bold vision of the corporation as a vehicle for sustainable value creation for all stakeholders, clearly connected to its societal and environmental context. For Nigeria, the lessons are clear:
For Regulators (FRCN): Use King V as a benchmark for the future development of the Nigerian code, particularly in enhancing outcomes-based reporting, integrating technology governance, and offering clearer guidance on ESG. The NCCG 2018 (which I had the benefit of working on 7 years ago) is long overdue for a review.
For Boards and Directors: Voluntarily adopt the advanced practices of King V, particularly in defining board character, integrating ESG into strategy, and establishing strong stakeholder engagement processes. This is a pathway to creating more resilient and reputable organisations.
For Investors and Stakeholders: Insist on higher-quality reporting that showcases governance outcomes, not merely practices.
King V reminds us that corporate governance is an ongoing process, not a fixed endpoint. By adopting its evolving framework, Nigeria can speed up its progress towards corporate governance that genuinely benefits its people, economy, and future.
Fabian Ajogwu writes from Kenna, Lagos.
