King IV for owner-managed businesses.

June 2026 · By Tavison Mugorogodi, Partner — Audit, Risk & Governance

Mention King IV to the owner of a growing business and you can watch the shutters come down: boards, committees, charters — machinery for listed companies, surely. In fact, King IV was deliberately written to apply to all organisations, proportionately, and its central demand is not bureaucracy. It is that someone can explain, honestly, how the business is being directed and controlled.

Apply and explain — not comply or else

King IV works on an "apply and explain" basis: you apply its principles and explain the practices you use to achieve them. It is voluntary for private companies (some sectors and public entities aside), but that is not the point. The point is that banks, funders, enterprise customers and B-BBEE verification agencies increasingly use governance questions in their due diligence — and "we have never thought about it" is the one answer that fails.

For an owner-managed company, the honest question is not "how do we build a board like a listed company's?" It is: what would break if you doubled in size, or if you stepped away for three months? King IV's principles, scaled properly, are simply the answer to that question written down.

The principles that genuinely matter at SME scale

• Ethical, accountable leadership: the tone the owner sets is the control environment. In a 30-person business, culture is the strongest control there is.
• Clear roles and delegation: who may approve what, to what value, in whose absence — written down. Most SME fraud lives in the gap where this document should be.
• Risk oversight as a routine: a live risk register, reviewed quarterly, owned by named people — not a binder produced once for a funder.
• Assurance where it counts: you do not need three lines of defence with org charts; you need independent eyes on payments, procurement and payroll at a frequency that fits your risk.
• Stakeholder relationships: SARS, your bank, key customers, employees — managed deliberately, because at SME scale a single damaged relationship can be existential.

Five practices that punch above their weight

• An independent voice. One experienced outsider — an advisory board member or non-executive — who asks the questions nobody inside will. This is the single highest-value governance step an owner-managed business can take.
• A written delegation of authority. One page. Approval limits, bank signatories, procurement thresholds. Reviewed annually.
• A quarterly risk and controls review. Standing agenda: top risks, incidents, findings fixed, findings outstanding.
• A documented meeting rhythm. A short monthly management meeting with minutes and numbers beats an elaborate charter no one follows.
• An annual "explain" statement. One or two pages recording how you govern the business — ready before any funder or customer asks for it.

Governance done this way is not overhead. It is what lets an owner delegate without losing control — and it turns due diligence from an ordeal into a formality. That is the working philosophy of our internal audit, risk and governance practice.

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