Technologically Literate Boards: The New Standard King V Is Setting for South African Directors

Corporate governance in South Africa has just been redefined — and the boards that cannot demonstrate technological literacy in the age of AI are already falling behind

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South Africa has quietly crossed a significant governance threshold. On 31 October 2025, the Institute of Directors in South Africa and the King Committee published King V — the fifth edition of South Africa’s landmark corporate governance code, now in effect for financial years beginning on or after 1 January 2026. For most business leaders, King V has registered as a governance update requiring board attention. It is considerably more than that. It is a direct and binding challenge to the composition, capability, and AI literacy of South African boardrooms — and the implications for directors who have not yet taken artificial intelligence seriously are significant.

CONTEXT AND BACKGROUND

King V supersedes King IV, streamlines the governance framework from 17 to 13 principles, and introduces an outcomes-driven disclosure model that demands boards demonstrate that their governance practices actually produced results — not merely that they adopted them. As Mayet and Associates have noted, the shift from intent to impact is the most fundamental change in King V: boards must now evidence outcomes rather than procedures, and that standard applies with full force to the governance of technology and AI.

The specific provision that should command the attention of every South African director is Principle 10, which states that the governing body must govern data, information, and technology in a way that enables the organisation to sustain and optimise its strategy and objectives. As Clyde and Co has documented in its analysis of King V, the code makes explicit that governing bodies must be technologically literate — not just financially literate — and that oversight of artificial intelligence is now a direct board-level accountability rather than a matter to be delegated downwards. For AI specifically, King V requires that boards ensure clear accountability for designs, actions, outputs, and outcomes — including subjecting AI models, algorithms, data, and processes to human oversight and override mechanisms commensurate with the level of risk to the organisation and its stakeholders.

This is not an incremental change to existing practice. King V is the first iteration of South Africa’s governance code to treat data, information, technology, and AI as a standalone governance pillar — one that sits alongside financial oversight, risk management, and ethical leadership as a core board responsibility. As ITLawCo has summarised, for regulated industries including banking, insurance, healthcare, and fintech, these duties interact directly with POPIA, JSE Listings Requirements, and sectoral standards. The compliance picture is more interlocking than most boards have yet appreciated.

INSIGHT AND ANALYSIS

The problem is that the standard King V is now setting is one that most South African boardrooms are not yet meeting. This is not a local peculiarity. Research by McKinsey found that 66% of board directors globally report having limited to no knowledge or experience with AI, and nearly one in three say AI does not even appear on their board agendas. An Axios report citing McKinsey research found that only 39% of Fortune 100 boards have any form of AI oversight — committees, a director with AI expertise, or an ethics board. Only 13% of S&P 500 companies have at least one director with AI-related expertise. If these are the figures for the world’s most scrutinised boards, the situation in South African boardrooms is unlikely to be more encouraging.

The gap between the governance standard King V now demands and the actual AI literacy present in most boardrooms is where the real risk lies. As the Directors Institute has observed, directors do not need to become technologists — but they do need to understand the basic logic of AI systems, the limitations of generative AI tools, and the potential for unintended outcomes, because without that baseline literacy, meaningful oversight is simply impossible. A board that cannot ask intelligent questions about how AI models are tested, how bias is detected, what data is used for training, and what the escalation process is when an AI system produces harmful outcomes is not governing AI. It is delegating governance to management and hoping for the best.

The consequences of that delegation are becoming concrete. A PwC survey of corporate directors found a record high of 55% believing at least one peer should be replaced — citing a lack of necessary expertise. For the first time, more than half of directors acknowledge their boards have a fundamental skills problem in precisely the areas — AI, cybersecurity, and geopolitical risk — that are now dominating governance agendas. King V has now formalised what that skills problem means in the South African context: it is not merely a strategic weakness. It is a governance failure.

IMPLICATIONS

For nomination committees and shareholders, the implications of King V are direct. Director selection criteria must now include assessment of technological literacy alongside financial expertise, industry experience, and independence. King V’s requirement for technological literacy at board level is not aspirational — it is a governance outcome that must be demonstrable. Boards that are composed entirely of directors with traditional financial and operational backgrounds, without meaningful AI fluency, are structurally unable to meet the standard the code now requires.

For current directors, the path forward is structured education rather than superficial awareness. As Fortune has reported, organisations with AI-literate boards outperform peers by significant margins in return on equity, and boards with at least one member experienced in AI governance are dramatically more effective at identifying AI risks early. The investment in building genuine board-level AI literacy is not a compliance cost. It is a competitive and fiduciary imperative.

For organisations more broadly, King V’s alignment with South Africa’s evolving regulatory landscape — including the draft National AI Policy now open for public comment — means that the governance frameworks boards build now will need to serve not just the current standard but the more detailed regulatory requirements that follow. Boards that engage with King V’s AI provisions early will be better positioned to navigate that landscape than those who wait for the next compliance deadline to force the conversation.

CLOSING TAKEAWAY

King V has drawn a clear line between the era of the financially literate board and the era of the technologically literate one. South Africa’s governance tradition has produced some of the most admired corporate governance frameworks in the world. The King Reports have been adopted and referenced across Africa and beyond. King V continues that tradition — but it does so in a world where artificial intelligence is making consequential decisions inside organisations every day, and where the board that does not understand those decisions is not governing the organisation it is responsible for. The standard has been set. The question for every South African director is not whether King V applies to them. It is whether their board is ready to meet it.

Author Bio: Johan Steyn is a prominent AI thought leader, speaker, and author with a deep understanding of artificial intelligence’s impact on business and society. He served as a working group member contributing recommendations toward South Africa’s national AI strategy, an initiative by the National Advisory Council on Innovation, the Council for Scientific and Industrial Research, the Human Sciences Research Council, and the Department of Science and Innovation. He is passionate about ethical AI development and its role in shaping a better future. Find out more about Johan’s work at https://www.aiforbusiness.net