Companies Amendment Act slammed for not being business friendly

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The Companies Amendment Act was published in the Government Gazette on 30 July, but no promulgation date has been announced.

The Companies Amendment Act has been criticised for being anything but business friendly, especially since the president has repeatedly promised to ensure that government makes it easier to do business in South Africa.

“In an ideal world, decisions and disclosures are based on principle as opposed to being forced by law, so that all stakeholders have a say in reaching an ideal outcome, not just shareholders. However, we do not live in an ideal world,” says Nicol Mullins, president of SARA.

“If the remuneration report is not approved at the first AGM after the implementation date of the Act, the committee must engage with shareholders and present feedback on how these concerns were addressed in the remuneration report tabled for an ordinary resolution at the next AGM and they must be re-elected onto the Remuneration Committee.

“There is no B-team standing by to take over and therefore, their loss may impact remuneration governance in an organisation and threatens its continuity while new directors are sourced. Boards may need to have more independent non-executive directors to provide for such a situation, making boards more expensive.”between the top 5% of their earners and the bottom 5%, which is different from the Labour Relations Act’s requirements.

 

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