King Codes on Corporate Governance and ESG Performance: Evidence from FTSE/JSE All-Share Index.

Given the importance of the link between corporate governance and <IR>, it is worth assessing how this trend is developing and evolving by identifying the main drivers of this important challenge. This topic attracts attention on South Africa where this relationship seems to achieve a high significance. To assess this topic, this chapter seeks to analyse in-depth the consequences of the adoption of King III (IODSA 2009) which came into effect in 2010, and the main changes from the recent release of the Corporate Governance Code Draft King IV™ on Corporate Governance for South Africa 2016. The main objective of King III and, afterwards, King IV, is to promote good corporate governance as a driver for ethical and effective leadership at board level. This aim can be achieved through an ethical culture, sustainable performance, adequate control by the governing body and protecting trust in the organization, its reputation and legitimacy (IODSA 2013). Following this initial analysis, we aim to assess the potential correlation between the environmental/social performance and corporate governance practices after the adoption of the King III, which represented a radical shift towards the enhancement of sustainability-related issues in business activities and the corporate governance system.