n Acta Juridica - South Africa moves to a global model of corporate governance but with important national variations : corporate governance and mergers & takeovers : part ll

Volume 2010, Issue 1
  • ISSN : 0065-1346
  • E-ISSN: 1996-2088



South Africa's path toward sustainable economic development requires a sound legal structure for governance of its businesses - a structure that complements and supports the continuing development of a diverse, equitable political system and respects South Africa's distinct social needs. With the Companies Act of 2008, South Africa has established a model of corporate regulation that can substantially improve its business climate while supporting essential broader economic and social aims. In this chapter, we compare the new Companies Act governance provisions to those in comparable statutes in the United States, the United Kingdom, and Germany. We also compare Companies Act rules to securities market listing standards, codes applicable to publicly traded companies, and other statements of corporate governance 'best practices', including those set out in the King Reports. The comparative analysis addresses protection of stakeholder rights; board duties, governance, and independence; appointment and removal of directors; director and management compensation; board supervision of management; and shareholder rights. Our analysis confirms that, in line with tested standards in other major economies and current international trends in corporate governance, the Companies Act sets out a modern, enabling model of regulation. In providing for flexibility and simplicity of company formation, transparency of governance, and effective exercise of shareholder rights, the Act creates a secure environment for entrepreneurship and investment. At the same time, it establishes standards of corporate responsibility distinctly appropriate to South Africa.

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