Advantages and disadvantages of partial codification of directors’ duties in the South African Companies Act 71 of 2008
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Date
2016
Authors
Coetzee, L.
Van Tonder, J. L.
Journal Title
Journal ISSN
Volume Title
Publisher
Faculty of Law, University of the Free State
Abstract
This article offers a critical examination of partial codification and
its effect on the interpretation of the directors’ standard of conduct
provision. Previously, the fiduciary duties and the duty of care and
skill were regulated by the common law and case law. In May 2004,
the Department of Trade and Industry released a policy document
entitled South African company law for the 21st century: Guidelines
for corporate law reform. The policy document acknowledged that
South Africa had no extensive statutory dispensation that covered
the duties of directors. The policy document recognised the need
to bring South African company law in line with international trends
and to reflect and accommodate the changing environment for
businesses locally and internationally. For the first time in South
Africa’s corporate law history, the Companies Act 71 of 2008
partially codifies the fiduciary duties of directors, the duty of care
and skill, and introduces the business judgement rule (also referred
to as the ‘safe-harbour provisions’) into South African company
law. The Companies Act 71 of 2008 prescribes certain duties and
its extent, but the content of those duties, such as bona fides, is
still determined by the common law.
Description
Keywords
Corporate law, South Africa, Companies Act 71 of 2008, Company law
Citation
Coetzee, L., & Van Tonder, J. L. (2016). Advantages and disadvantages of partial codification of directors’ duties in the South African Companies Act 71 of 2008. Journal for Juridical Science, 41(2), 1-13.