When a company falls out with its CEO: lessons from South Africa’s Old Mutual

where courts had indeed reinstated executive directors. But the close relationship between a board and an executive director makes it tricky.

The position of a chief executive of a company requires a special relationship of trust and confidence. Old Mutual said that it has lost trust and confidence in Moyo because of his conflict of interest. Moyo in turn said that he lost trust and confidence in the chairman and the directors. He said publicly that he was taking action to have the entireBecause of the clear breakdown in trust and confidence, the court said that there was no realistic prospect of Moyo ever being reinstated.

A court will not readily order the reinstatement of a director where the relationship with the board has broken down. If directors wish to be reinstated after leaving, they must demonstrate that their relationship with the company is still viable.The other reason Old Mutual cited for losing trust and confidence in Moyo was that he’d given public interviews to the media after his suspension in which he criticised Old Mutual.

Negative publicity about a company can discredit it, and harm the directors’ reputation. It can also affect the company’s share price. The negative publicity suffered by Old Mutual caused itsAs fiduciaries, directors must act in good faith and in the best interests of the company. South Africa’s corporate governance code –– recommends that directors should act ethically, beyond mere legal compliance, and that directors should set the tone for an ethical organisational culture.

Directors should be careful not to breach their company’s media policy – if there is one – even after they leave the company. They should exercise caution in the public statements they make about the company. Making negative statements can lead to the relationship breaking down even further, making their reinstatement impossible. It could also limit their chances of being appointed to other boards because of the fear that they may again harm the company’s reputation.

Go woke go broke.

Execution is clearly cheaper than litigation

Can be mistaken for General Holomisa. Should we ask for utatakho?

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