What’s in a King? Unveiling the pragmatic micro-perceived value attributes of a fulfilling corporate governance code for responsible sustainable development

Abstract

Purpose A recent contribution entitled Global Responsibility and the King Reports was made to the literature that represents a significant advancement in the understanding of how standards of good governance are practised. The corpus revealed key insights about macro-institutional governance regimes, yet, extraordinarily little about meso-organisational and even less so, micro-individual corporate governance practice. This study aims to shed light on the micro-individual level of corporate governance practice which has remained obscured by drawing pragmatic insights from the landmark South African King Code experience that may be applied to other governance jurisdictions for global organisational responsibility. Design/methodology/approach To unearth micro-individual corporate governance code practices, a phenomenological exploration of corporate governance practitioners’ (CGPs) perceptions was conducted. Qualitative semi-structured interviews with senior board members of securities-exchange listed companies were conducted with 10 directors of leading multinational South African corporations listed on Africa’s largest formal financial market; the Johannesburg Stock Exchange. Recursive analysis of the qualitative data revealed key attributes that render a corporate governance code “fulfilling” as a consequence of being perceived as subjectively valuable by practitioners who are the ultimate end-users of the King Codes for advancing good corporate governance practice in each of their respective companies. Findings Two categories of fulfilling micro-perceived value attributes (MPVAs) of corporate governance codes emerged, namely, internal and external MPVAs. The three internal MPVAs are, namely, (I1) Meaningful innovation, (I2) Ethical pragmatism and (I3) Cultural transformation. The three external MPVAs are, namely, (E1) Governance legitimacy, (E2) Societal licencing and (E3) Risk mitigation. From these six attributes, two testable corporate governance code development propositions are advanced, namely, (P1) a corporate governance code with a higher constitution of MPVAs will fulfil CGPs more than one with less. (P2) A more fulfilling corporate governance code will enjoy higher adoption, application and/or compliance rates. Originality/value Illumining the subjective experiential perceptions that constitute the fulfilment of a corporate governance code deepens the pragmatic understanding of the “demand-side” or consumption of such codes in practice. Knowing these fulfilling MPVAs may also result in the development of codes that enjoy wider adoption and compliance rates thereby enhancing global corporate responsibility pragmatism through enhanced good governance. This study sheds light on the nexus where normative corporate governance principles and the enactment thereof meet at the coalface of organisational activity with an emphasis on those attributes that render them valuable to practitioners.

How improved understanding of what constitutes “value” may lead to better underpinning of corporate social responsibility (CSR)

“…They shed light on how the King Codes are woven into the social fabric of daily organisational practice. They suggest such knowledge will be of much value to organisations that seek to enhance their CG and social responsibility performance (Thakhathi et al , 2021). In this case, it can be inferred that “knowledge” is an overall value being sought; however, the lack of specificity is problematic.…”

“…Interacting with stakeholders and value-seekers is germane to CSR studies. Indeed, of the 23 JGR journals sampled herein, only 2 (Dean et al , 2020; Thakhathi, 2021) do not refer to stakeholders specifically.…”

“…Their efficacy beliefs, self-theories and personal qualities, when aligned with a sense of underlying Corporate social responsibility purpose and value, enable them to feel that it is possible to make a difference apropos how they will perform in work (Robinson and Dowson, 2011). Thakhathi et al (2021) suggest that human values are an important consideration in understanding CG practice. They shed light on how the King Codes are woven into the social fabric of daily organisational practice.…”

“…Using goods-dominant language, Adner & Kapoor speak of value chains, where upstream and downstream activities act in series. Such "non interactive value formation" (Echeverri & Skålén, 2011) Thakhathi, 2021) do not refer to stakeholders specifically.…”

A qualitative examination of how accountability manifests itself in a circular economy

“…The author then analyzed the common quality and timeframe aspects of carbon targets, as well as whether carbon targets differ between carbon-intensive and less carbon-intensive businesses. Further, Thakhathi et al (2021) used qualitative SSIs to shed light on the obscured micro-individual level of corporate governance practice by drawing pragmatic insights from the landmark South African King Code experience that can be applied to other governance jurisdictions for global organizational accountability and responsibility. The combined effect of the literature review revealed that, despite the increase in CE studies, there is still a scarcity of studies that address how accountability manifests within the circularity space.…”