Systems value creation: The new currency of governance

Nqobani Mzizi

Governance in South Africa has entered a new season. With the arrival of the King V code, boards are being called to widen their field of vision and recognise that value no longer belongs only to the organisation that creates it. The Code introduces the idea of systems value creation as the defining purpose of governance. It signals a shift in how leadership understands responsibility, resilience and legitimacy.

Systems value creation recognises that every organisation exists within an intricate web of relationships. Its success depends on the health of the systems that surround it – the economy, society, the environment and the people who give it meaning. The concept asks a simple but profound question: what kind of value do we create for the systems that sustain us, and what do we take from them in return?

Where previous governance frameworks placed emphasis on sustainable value creation, the new Code expands the focus. It describes governance as the creation, preservation and possible erosion of systems value. The governing body’s focus thus expands, from ensuring the organisation’s continuity to encompassing its influence on the stability and wellbeing of the systems that enable its existence. This is governance seen through a lens of interdependence.

When a board adopts this perspective, its conversations begin to change. Decision-making becomes less about immediate performance and more about continuity and consequence. Each strategic choice carries both internal and external effects that must be understood. The question is no longer how to extract value from the system, but how to contribute to its strength so that long-term value can exist at all.

Some South African organisations have already embraced this thinking. Clicks Group is one example. Its integrated report reflects a board that leads with awareness of the broader context. It describes its role as providing direction and oversight to ensure value creation within the triple context of the economy, society and the environment. That language reveals a board conscious of its ecosystem. Its focus on responsible retailing, local supply chains and health access demonstrates how systems thinking shapes both resilience and reputation.

Mr Price Group offers another illustration. Its annual reporting integrates financial and environmental performance, social impact and supply-chain responsibility into a single narrative. It views its people, customers and communities as part of a shared network of value creation. By embedding this mindset, the company has strengthened its adaptability to changing consumer expectations and regulatory pressures. These examples show that governance guided by systems awareness is not theoretical. It is a practical approach that builds long-term stability and legitimacy.

The move toward systems value creation is not optional. It is now a governance imperative. The Code makes clear that governing bodies must account for the organisation’s impact on the systems that support it. This imperative arises because the world around us has changed. Interconnected risks, climate disruption, digital transformation and widening inequality have exposed how fragile the systems we rely on have become. Boards can no longer protect only the organisation; they must protect the environment that allows it to function.

Adopting this principle therefore becomes essential for several reasons. It builds resilience by helping boards understand dependencies and vulnerabilities that extend beyond their balance sheets. It enhances legitimacy because stakeholders are increasingly alert to whether an organisation contributes to or extracts from the system around it. It strengthens leadership coherence by aligning governance, strategy and culture around a shared purpose that transcends financial metrics. When boards adopt this lens, they move closer to the ethical centre of leadership.

Systems value creation also restores the moral dimension of governance. It reminds leaders that every decision leaves a footprint beyond financial results. To govern responsibly is to accept that the use of resources and relationships creates obligation. Integrity, competence, responsibility, accountability, fairness and transparency – the ICRAFT traits – are not just internal virtues. They are promises made to the systems that give the organisation life.

In practice, adopting this approach means understanding the organisation’s system dependencies and effects: the people, partners, technologies and natural resources that sustain it. Boards are encouraged to integrate this awareness into strategy, risk management and performance evaluation. Reporting should then demonstrate how the organisation’s strategy and governance contribute to the resilience of the very systems that make its success possible. This is how accountability deepens: by shifting the focus from the volume of reports to the quality of consciousness that informs them.

The imperative to adopt systems value creation also reshapes how we define success. In a world marked by uncertainty, enduring organisations are those that see connection rather than isolation and contribution rather than extraction. Systems value creation teaches that the health of the whole determines the health of each part. The Code gives this truth a name, but wise leaders have always known it.

For many years, South African governance has been admired for its philosophical depth. King V continues that legacy while challenging us to translate philosophy into practice. Systems value creation is the bridge between the two. It is how ethical leadership becomes measurable and how strategy gains moral weight.

As I reflect on this evolution, I am reminded that governance is not about control. It is about care. It asks leaders to hold the present with enough responsibility that the future can still breathe. The opportunity before us is to make that care visible – in strategies, in decisions and in cultures that value purpose over formality.

As boards begin to engage with this idea, three questions arise:

• Are we creating value that strengthens the systems we depend on?
• Are we protecting the integrity of those systems for those who will inherit them?
• And when the time comes to pass the baton, will we be remembered as leaders who preserved the future, or as ones who merely managed the present?

If we can answer these questions with honesty and humility, we will have done more than comply with a new Code. We will have embraced the spirit of governance as stewardship. We will have understood that systems value creation is not an abstract principle but a living commitment to balance progress with preservation.

Nqobani Mzizi is a Professional Accountant (SA), Cert.Dir (IoDSA) and an Academic.

** The views expressed do not necessarily reflect the views of IOL or Independent Media.

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