n Acta Juridica - Transparency and accountability under the new company law : corporate formation and corporate finance : part I
|Article Title||Transparency and accountability under the new company law : corporate formation and corporate finance : part I|
|© Publisher:||Juta Law Publishing|
|Author||Caroline B. Ncube|
|Publication Date||Jan 2010|
|Pages||43 - 72|
This paper discusses the two-tier transparency and accountability regime provided for by the Companies Act 71 of 2008 (the Act). It includes a detailed outline and an analysis of the relevant provisions hinged on JL Mashaw's six-facet enquiry into governance. The analysis also includes a comparison with the provisions of the King Code of Governance Principles for South Africa 2009 (King III Code). The paper finds that the Act retains many of the provisions of the Companies Act 61 of 1973 but omits references to public interest, closely held and widely-held companies as these types of company are not provided for in the Act. Further it makes substantive changes such as increasing the minimum audit committee membership from two to three; providing for audits in the public interest; an express statement of a company secretary's accountability to the board and the statutory statement of directors' duties accompanied by the provision for the business judgment rule. These changes serve various ends ranging from confirming the legal position with regard to company secretaries to better protecting society through requiring audits in the public interest and codifying directors' duties. The Act's provisions are largely mirrored by the King III Code although certain inconsistencies are evident, for example, with regard to the appointment of company secretaries. However, in such instances the Act prevails. Overall, the paper concludes that the Act's transparency and accountability provisions are both comprehensive and appropriate.
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