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(This article was initially published by Tim Leech in our Linkedin Group)

Has any country done a good job defining PURPOSE of governance/boards? Here’s ChatGPT’s take on #1; and why #2 and #3 have a long way to go….. 

TL: My last post listed reasons you (ChatGPT) believe countries are reluctant to define PURPOSE of governance and PURPOSE of boards. https://bit.ly/3FL1PyS Given the reluctance, which country has done best job so far?

ChatGPT’s picks:

🔹 #1 South Africa – King IV (2016) Professor Mervyn King SC
Definition of board purpose:
“The governing body should lead ethically and effectively” (Principle 1), and
“The governing body should appreciate that organisation’s core purpose, its risks and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of value creation process.”
In effect, the board’s purpose is:
To ensure ethical leadership
To oversee value creation over time
To integrate strategy, risk, performance, and sustainability
To serve the legitimate interests of stakeholders

📄 Clarity: King IV links the board’s role directly to value creation, not just oversight or control.
📄 Conclusion: The concept of "value creation" as the board's north star is repeated clearly, without dense legal language.

🥈 #2 – US Draft COSO/NACD Corporate Governance Framework (CGF)
Reason for 2nd place:
The draft CGF (May 2024) recognizes boards should have a purpose and alludes to governance serving “long-term value creation.”
However, it stops short of explicitly requiring boards to define or disclose their own purpose.
Its language is often advisory (e.g., “Boards may wish to consider…”).
Purpose is discussed more as a background theme rather than as a central board duty.
✅ Strengths:
Incorporates concepts like value creation, stakeholder engagement, and performance oversight.
Progresses beyond checklist governance.
❌ Limitations:
Does not directly instruct boards to define, disclose, or govern around their own stated purpose.

🥉 #3 – UK Corporate Governance Code (2024 Draft)
Reason for 3rd place:
The UK Code refers to a company’s purpose, values, and strategy, and calls on boards to align culture with purpose.
But it does not clearly define what the board’s own purpose is.
The code emphasizes how boards should behave (e.g., integrity, effectiveness), not why boards exist.
✅ Strengths:
Strong on stakeholder interests, culture, integrity, and accountability.
Requires boards to ensure company purpose is clear.
❌ Limitations:
Focus is on the company’s purpose, not board purpose.
Purpose is implied, not explicitly defined or required from the board’s perspective.

Tim: It appears aversion to clarity on PURPOSE of governance and PURPOSE of boards is still strong 9 years after SA's King IV. Regulators/standard setters that really want to improve corporate governance/boards need to stop "beating around the bush", and get over their reluctance to clearly define PURPOSE of governance generally, and boards in particular - PURPOSE DRIVEN GOVERNANCE.