n Stellenbosch Law Review = Stellenbosch Regstydskrif - Models for reform : the directors' duty of care in a modern commercial world

Volume 20, Issue 3
  • ISSN : 1016-4359
  • E-ISSN: 1996-2193



The Australian responses to corporate collapses in the modern commercial world have been implemented at both judicial and legislative levels over a period of decades. South Africa has lagged behind the reform process, only recently reviewing its company laws with a view to legislatively incorporating, , its directors' duties. The consequence of such review of the duty of care is found in subsection 76(3)(c) of the Companies Act 71 of 2008. This article critically evaluates the existing South African common law and the new legislative directors' duty of care in light of the equivalent duties in Australia and the United States. The analysis ultimately aims at determining whether the approach taken in any of these jurisdictions provides useful guidance in regard to reform options for the duty of care. While the Companies Act contains features that are preferable to the Australian Corporations Act 2001, the impact of the Companies Act on crucial features, such as the objectivity of the duty of care, is unclear and will have to await judicial review. It is concluded that while the South African measures at times echo Australian law in a positive manner, the Australian legislative regime is not without legitimate criticism as it can be unnecessarily complicated. Ultimately it is the United States and Australian common law duty of care that provides the best model for legislative reform.

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