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The structure of the social and ethics committee in South Africa and the protection of non-shareholder constituencies
In South African company law, shareholders remain to be the only stakeholders to hold a privileged position in the governance of companies because they are the exclusive beneficiaries of the director's fiduciary duties. However, the requirement for certain companies to appoint a Social and Ethics Co...
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| Format: | Thesis |
| Language: | English |
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Department of Commercial Law
2021
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| _version_ | 1867613203583729664 |
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| access_status_str | Open Access |
| author | Nanyemba, Tangeni Ndafapawa |
| author2 | Maphiri, Mikovhe |
| author_browse | Maphiri, Mikovhe Nanyemba, Tangeni Ndafapawa |
| author_facet | Maphiri, Mikovhe Nanyemba, Tangeni Ndafapawa |
| author_sort | Nanyemba, Tangeni Ndafapawa |
| collection | Thesis |
| description | In South African company law, shareholders remain to be the only stakeholders to hold a privileged position in the governance of companies because they are the exclusive beneficiaries of the director's fiduciary duties. However, the requirement for certain companies to appoint a Social and Ethics Committee in terms of section 72(4) of the Companies Act 71 of 2008 read with Regulation 43 of the Companies Regulations, 2011, arguably disrupts the traditional focus on exclusive shareholder protection by purporting to offer non-shareholder constituencies' legal recognition. These provisions require certain companies to report on how the operations of a company impact a broad range of non-shareholder constituencies including employees, the environment, consumers, suppliers, and communities. In this regard, the committee presents as an ideal conduit through which it can sensitize the board of directors of companies to issues of national priority in South Africa such as job creation, adequate housing, anti-corruption, climate change, and access to health care. However, the ability of the committee to deliver on its mandate and to address the concomitant issues of national priority is curtailed by a plethora of shortcomings and ambiguities. The Companies Act and Regulations contain many contradictions as they refer to generic terms of reference regarding the committee's role and they do not provide clarity regarding its powers, functions, objectives, and purpose. Furthermore, there is much uncertainty regarding the committee's appointment by either the board of directors or the shareholders of the company. This dissertation examines the philosophical foundation of the committee to determine whether it is conducive for protecting non-shareholder constituencies. The main objective of this dissertation is to examine the committee's legal status and structure. This will entail an analysis of its duties, capacities, and incapacities to determine whether section 72(4) of the Companies Act read with Regulation 43 of the Companies Regulations is a viable mechanism that can be enforced to protect non-shareholder constituencies. This analysis is also conducted to identify gaps in the committee's statutory formulation to develop and recommend a tailormade stakeholder protection model for South Africa. Furthermore, a comparative overview of stakeholder protection in the United States and the United Kingdom is undertaken to determine how these countries protect non-shareholder constituencies and to establish whether there are lessons to be drawn that may influence corporate law reform in South Africa. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/32935 |
| institution | University of Cape Town (South Africa) |
| language | eng |
| last_indexed | 2026-06-10T12:32:24.523Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2021 |
| publishDateRange | 2021 |
| publishDateSort | 2021 |
| publisher | Department of Commercial Law |
| publisherStr | Department of Commercial Law |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/32935 The structure of the social and ethics committee in South Africa and the protection of non-shareholder constituencies Nanyemba, Tangeni Ndafapawa Maphiri, Mikovhe Commercial Law In South African company law, shareholders remain to be the only stakeholders to hold a privileged position in the governance of companies because they are the exclusive beneficiaries of the director's fiduciary duties. However, the requirement for certain companies to appoint a Social and Ethics Committee in terms of section 72(4) of the Companies Act 71 of 2008 read with Regulation 43 of the Companies Regulations, 2011, arguably disrupts the traditional focus on exclusive shareholder protection by purporting to offer non-shareholder constituencies' legal recognition. These provisions require certain companies to report on how the operations of a company impact a broad range of non-shareholder constituencies including employees, the environment, consumers, suppliers, and communities. In this regard, the committee presents as an ideal conduit through which it can sensitize the board of directors of companies to issues of national priority in South Africa such as job creation, adequate housing, anti-corruption, climate change, and access to health care. However, the ability of the committee to deliver on its mandate and to address the concomitant issues of national priority is curtailed by a plethora of shortcomings and ambiguities. The Companies Act and Regulations contain many contradictions as they refer to generic terms of reference regarding the committee's role and they do not provide clarity regarding its powers, functions, objectives, and purpose. Furthermore, there is much uncertainty regarding the committee's appointment by either the board of directors or the shareholders of the company. This dissertation examines the philosophical foundation of the committee to determine whether it is conducive for protecting non-shareholder constituencies. The main objective of this dissertation is to examine the committee's legal status and structure. This will entail an analysis of its duties, capacities, and incapacities to determine whether section 72(4) of the Companies Act read with Regulation 43 of the Companies Regulations is a viable mechanism that can be enforced to protect non-shareholder constituencies. This analysis is also conducted to identify gaps in the committee's statutory formulation to develop and recommend a tailormade stakeholder protection model for South Africa. Furthermore, a comparative overview of stakeholder protection in the United States and the United Kingdom is undertaken to determine how these countries protect non-shareholder constituencies and to establish whether there are lessons to be drawn that may influence corporate law reform in South Africa. 2021-02-23T10:34:15Z 2021-02-23T10:34:15Z 2020 2021-02-23T07:58:03Z Master Thesis Masters LLM http://hdl.handle.net/11427/32935 eng application/pdf Department of Commercial Law Faculty of Law |
| spellingShingle | Commercial Law Nanyemba, Tangeni Ndafapawa The structure of the social and ethics committee in South Africa and the protection of non-shareholder constituencies |
| thesis_degree_str | Master's |
| title | The structure of the social and ethics committee in South Africa and the protection of non-shareholder constituencies |
| title_full | The structure of the social and ethics committee in South Africa and the protection of non-shareholder constituencies |
| title_fullStr | The structure of the social and ethics committee in South Africa and the protection of non-shareholder constituencies |
| title_full_unstemmed | The structure of the social and ethics committee in South Africa and the protection of non-shareholder constituencies |
| title_short | The structure of the social and ethics committee in South Africa and the protection of non-shareholder constituencies |
| title_sort | structure of the social and ethics committee in south africa and the protection of non shareholder constituencies |
| topic | Commercial Law |
| url | http://hdl.handle.net/11427/32935 |
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