Welcome to the Center for Corporate Governance

Code for Responsible Investing in South Africa (“CRISA”)

The commitment to assimilate Environmental, Social and Governance (“ESG”) considerations into investment decisions is illustrative of the fact that ESG issues are critical investment considerations going forward. This is in the wake of serious sustainability challenges globally which can no longer be sustained.

So what is CRISA? It is voluntary code/principles that recognise the value of seamlessly incorporating sustainability issues, into long-term investment strategies. As such it encourages institutional investors to fulfil their executive investment analysis/activities (of rights) in line with promoting sound governance and ensuring responsible investing. It has been proposed that foreign pension funds, insurance companies, investment trusts and other collective investment vehicles apply this code to the extent that they invest in South African companies. Once applied and disclosed the CRISA principles will guide the ultimate beneficiaries of investments to pose the correct questions to institutional investors. CRISA will also empower beneficiaries to select responsible custodians for their investments.

In South Africa the ‘apply or explain’ basis for Corporate Governance has been adopted as per the King Report on Governance for South Africa 2009 (King III).

The South Africa approach to corporate governance is characterised by 'comply-or-explain' disclosures that rely heavily on the empowerment of shareholders facilitated by full and frank disclosures of the governance arrangements adopted by the company. It relies also on effective monitoring and challenge from independent non-executive directors both at board meetings and in the various committees on which they serve. The current frameworks for corporate governance used in South Africa and other Commonwealth countries are under intense scrutiny at present and time will tell whether the model emerges unscathed.