To what extent have the Kings’s IV Report on Corporate Governance 2016 been reflected in Tanzania legal framework?

King IV Report establish several principles in operation of the institutions which are reflected in different municipal legislations of Tanzania such as The Companies Act[1], The Law of Contracts Act[2] and Employment and Labor Relations Act[3]. These laws provide several guidelines which conforms to the principles established by King IV Report such as leadership, reporting, responsibilities of the governing body, composition of the governing body, compliance governance and good a good corporate citizen.

Page 43 of the king IV report requires that, leadership of the corporate or organization must be effective and ethical, abiding to principles of competency, integrity and responsibility. The same principle is available under Section 182 and 185 of the Companies Act where directors of the company are required to perform their duties honestly, in good faith without intention to deceive and to the best interest of the corporate.[4]

Page 48 of the king IV report requires governing body to provide timely report to stakeholders and members of the corporate on the activities and financial statements of the company to enable them to conduct assessment on development of the company. Section 159, 161, 164, 165 and 166 of the Companies Act reflects the principle of reporting because these sections require the copy of annual account, auditor’s report and director’s report to be handed to all members of the company. This is disclosure of information of the company to members so as to guarantee safety and confidence to their investments.

Page 49 of the king IV report provides that, the governing body should be a custodian of the corporate and all its affairs. Section 181 reflects this principle by imposing duties to directors of the company to supervise all affairs of the company for the interests of the company and members at large.

Page 50 of the king IV report provides on composition of the governing body. The body should comprise appropriate balance of knowledge and skills, experience, diversity, exposure and independence. The same contents are reflected under section 90 and 193 of the Companies Act which provides on qualities and qualifications of directors of the company. The company depends skilled people so as to run efficiently hence both king IV report and our municipal legislations requires appointment of skilled people to take control of the affair of the company.

Page 63 of the king IV report requires the governing body to comply to the applicable laws and adopted non-binding rules, codes and standards which will enable company to operate free from hands of law. Section 128 and 167 of the Companies Act reflected this principle by imposing a duty to board of directors to make sure they comply to national laws during operation of the company.

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[1] The Companies Act, [No 12 R; E 2019]

[2] The Law of Contracts Act [Cap 345 R; E 2019]

[3] Employment and Labor Relations Act [Cap 366 R; E 2019]

[4] Kapogoro. D, “To what extent have the King’s IV Report on Corporate Governance, 2016 been reflected in Tanzania Legal Framework”, Article. Mzumbe University, 2022