n SA Mercantile Law Journal = SA Tydskrif vir Handelsreg - An appraisal of the modification of the director's duty of care and skill
|Article Title||An appraisal of the modification of the director's duty of care and skill|
|© Publisher:||Juta Law Publishing|
|Journal||SA Mercantile Law Journal = SA Tydskrif vir Handelsreg|
|Publication Date||Jan 2009|
|Pages||509 - 534|
Prior to the Companies Act ('the 2008 Act'), directors' rights and duties were derived principally from contracts entered into with the company, the memorandum and articles of association, the Companies Act ('the 1973 Act) and the common law. The common law imposes on directors both a fiduciary duty and a duty of care and skill. The 2007 Companies Bill (the '2007 Bill') initially proposed to codify directors duties, and now the 2008 Act partially codifies both the fiduciary duties and the duty of care and skill.
I will concentrate on the duty of care and skill and not deal with the fiduciary duties. I will discuss the existing duty of care and skill in terms of the common law, the business judgment rule, the influence of the King Codes on Corporate Governance on the duty of care and skill in South Africa, and the proposed codification of directors' duties, including the duty of care and skill, introduced by the 2007 Bill and contained in the 2008 Act. Finally, I will consider whether the South African duty of care and skill should have been partially codified and whether the business judgment rule should have been incorporated into South African law.
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