SOUTH AFRICA Trends and Developments Contributed by: Professor Michael Katz, Matthew Morrison, Madison Liebmann and Sinovuyo Damane, ENS
Global Political Risk All relevant risks are to be considered by governing bodies, however, the current global geopolitical cli - mate elevates the risks and consequences related to this to the top of the agenda and a country’s place in
cisation and destabilisation of supply chains and the growing prevalence of sanctions regimes demand that boards maintain robust horizon-scanning capabilities. The Companies Act requires the board of directors to manage the business and affairs of the company, and directors must exercise their powers in good faith, for a proper purpose and in the best interests of the company with a degree of care, skill and diligence that may reasonably be expected. In the current environ - ment, this fiduciary duty increasingly encompasses an obligation to understand and respond to geopolitical risks that may materially affect the company’s opera - tions, supply chains, market access and regulatory environment. Navigating between the evolving global north/west and global south/east old and new alliances South Africa’s unique position as a bridge between the Global North and Global South creates both risks and opportunities for companies. Deepening economic ties and continued engagement with China and the EU (two of South Africa’s largest trading partners) and ongoing engagements with the US require careful nav - igation. The African Continental Free Trade Area offers significant growth potential, but progress will largely depend on the willingness of member states to take co-ordinated action. Conclusion: Governance in a Time of Change The year 2026 marks a governance inflection point for South Africa. The convergence of the King V imple - mentation, the Climate Change Act, evolving AI regu - lation and reshaped global and South African political landscapes presents both unprecedented challenges and significant opportunities for organisations com - mitted to good governance. King V, with its refined principles, rigorous disclosure framework, and emphasis on systems value crea - tion, provides a robust governance architecture for navigating complexity. Its outcomes-based approach, delivered through the four governance outcomes of (i) ethical culture, (ii) performance and value creation, (iii) conformance and prudent control, and (iv) legitimacy, equips boards to respond to the multifaceted risks and opportunities of the current environment.
the global discourse is highly relevant. Trends, opportunities and challenges
South Africa faces an unusually complex geopolitical environment in 2026. As the first African country to host the G20 summit (November 2025), South Africa used its presidency to champion solidarity, equality and sustainable development, with African devel - opment and global inequality at the forefront of the agenda. The country’s membership of BRICS, which expanded to include new members from 2024, posi - tions it as a prominent voice for the Global South in advocating for reform of the international financial architecture, including the United Nations Security Council, the World Bank and the International Mon - etary Fund. US–South Africa relations and trade headwinds However, South Africa’s active, non-Western-aligned foreign policy posture has generated significant fric - tion with the United States under the Trump adminis - tration. The US withdrawal from the Just Energy Tran - sition Partnership, the suspension of development aid, the expiry of the African Growth and Opportunity Act (AGOA) in September 2025, and the imposition of a 30% reciprocal tariff on South African products have created substantial economic headwinds. AGOA was retroactively extended through 31 December 2026 by Congress in the United States in February 2026. Geopolitical risk: from tail risks to a minimum governance standard For boards and directors, geopolitical risk has shifted from being a tail risk to a minimum governance stand - ard. King V’s emphasis on risk governance (Principle 8) requires amongst other things, that the board of directors of a company ensures the establishment and implementation of business continuity arrangements that allow for organisational resilience, including the ability to operate under conditions of volatility, and to withstand and recover from acute shocks. These would include geopolitical risks. The increasing frag - mentation of the global trading environment, the politi -
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