Despite the King II Report, there will be more Enrons, MacMeds, Leisurenets and such like in the world. The mere act of launching the second King report will not change dubious business practices overnight. The demise of these companies happened under the existence of the first King report.

The question now, is what difference is the second King Report going to make. For the pessimist and offenders be warned. Contravention or non-compliance could cost that seat on the board and may also see you being included on the list of delinquent directors.

The seven principles amplified in the King II Report will have to be endorsed as the new way of conducting business. These principles have to be cultivated, nurtured and developed. The application of these seven basic business principles will go a long way to ensure the expectation gap is narrowed.

Discipline: Discipline refers to the commitment of senior management to adhere to company policies and procedures. In a global survey it was found 85% of SA "senior managers and directors have at some stage overridden controls to perpetrate fraud".

Clearly, the selfish attitude (or lack of discipline) of senior management needs to be improved if we want to narrow the expectation gap.

Transparency: This buzzword will encourage management to walk the talk. When directors provide information to the public they will be held accountable for its accuracy. The information should meet the criteria of relevance (usefulness) and reliability (credibility).

Independence: Measures should be in place to minimise or avoid situations where there could be a conflict of interest.

Accountability: Management finally will be accountable to the decision makers (the stakeholders who appointed them) for their actions. Delinquent directors need to get their house in order. For every decision that is made, the necessary approval processes and authorisation levels must be in place first.

Responsibility: Management is responsible, hence they should be held accountable for their behaviour. Unruly behaviour will be penalised. The days of carte blanche (mis)management and control are over.

Fairness: The principle of acknowledging and respecting all the stakeholders' rights must be balanced. The days of entering into lucrative contracts with friends and family without following company policies and procedures to the detriment of the "minority" shareholders are counted.

Social responsibility: Managers and directors need to watch more than the bottom line. Without living up to its social responsibilities, companies will be in danger of low staff morale and a bad public reputation.

The message to management is clear provide transparent and fair information. Avoid situations that may compromise independence and accountability. Walk the talk, be fair, be socially responsible, and maybe your actions will help to narrow the expectation gap.

A lack of these principles mirrors the total disregard of society's value system. Firms and their management need to close the expectation gap by living, advocating and cultivating the principles enshrined in the King report.

Fenner is with the accounting and auditing consulting practice, Nkonki Sizwe Ntsaluba Inc.

With acknowledgements to Raymond Fenner and Business Day.