A Critical and Comparative Analysis of the Regulation of the Office of the Chairman in Contemporary South African Companies

Abstract

The role of chairman of the board of directors of a contemporary company has evolved from procedural and ceremonial to complex and demanding. This article examines the appointment, tenure, functions, and liabilities of this position, as regulated by the Companies Act 71 of 2008, the JSE Limited Listings Requirements, and the King IV Report on Corporate Governance for South Africa 2016. The aim is to ascertain whether the guidance provided to chairmen on their appointment, tenure, functions, and liabilities is clear and adequate to guide them on what is expected of them in contemporary companies. Company law in the United Kingdom and Australia is compared because this area of law has been extensively developed in these jurisdictions and may offer guidance on the regulation of the office of the chairman of South African companies. The article contends that the guidance provided to a chairman by South African legal instruments is neither clear nor adequate. It identifies several shortcomings in the regulation of the chairman and makes recommendations to enhance the South African statutory and corporate governance provisions regulating the chairman.