Abstract
Central to company law is the promotion of corporate governance. An important question in company law still today is in whose interest the company should be managed. Corporate governance needs to address the entire span of responsibilities to stakeholders of the company such as customers, employees, shareholders, suppliers and the community at large. The promotion of human rights in the application of company law must also take place. This is extremely important given the significant role of enterprises within the social and economic life of the nation. The interests of various stakeholder groups in the context of the corporation as a "social institution" should be enhanced and protected. Because corporations are part of society and the community, like all of us, it is required of them to be socially responsible and have greater accountability to all stakeholders of the company. Although directors must act in the best interests of shareholders collectively they must also consider the interests of other stakeholders. Sustainable relationships with all the relevant stakeholders are thus important. The advancement of social justice is thus important to corporations in that they should take note of the Constitution, labour legislation and company law legislation when social justice issues are dealt with. Employees have become very important stakeholders of companies and their needs should be taken into account in the bigger corporate governance and social responsibility framework.
Highlights
The 19th century saw the foundations being laid down for modern corporations: this was the century of the entrepreneur
In this scenario new corporate law and a corporate governance regime no longer focus on shareholder wealth creation and accountability to the company itself: in its decision-making process the board should take into account the legitimate interests and expectations of stakeholders in making decisions in the best interest of the company.[8]
Section 77(2)(b) further provides that the liability of a director can take place in accordance with the common-law principles relating to delict for any loss, damages or costs sustained by the company as a consequence of any breach by the director of (i) a duty to act with the required degree of care, skill and diligence;[153] (ii) any provision of the Act not otherwise mentioned in that section; or (iii) any provision of the company’s Memorandum of Incorporation.[154]
Summary
The provisions of the Companies Act highlight that employees play an important role in the structures and processes that deal with control by management and decisionmaking in corporations. Companies have cognisance of the Constitution as well as labour legislation with regard to the protection provided by the law and the recognition of employees as stakeholders. The LRA in its objectives aims to "advance economic development, social justice, labour peace and the democratisation of the workplace".195 Statutory rights, their nature and scope and how they are implemented and enforced are important in the protection of workers’ rights. 212 Social transformation and redress from the policies of "apartheid" are important and should be integrated within the broader transition to sustainability because integrating sustainability and social transformation "in a strategic and coherent manner will give rise to greater opportunities, efficiencies, and benefits, for both the company and society" (Institute of Directors King Report III 13). It is a matter for further analysis whether insolvency and commercial law contain effective mechanisms, which labor law lacks and cannot develop
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: Potchefstroom Electronic Law Journal/Potchefstroomse Elektroniese Regsblad
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
