Abstract
Companies have become catalysts of socio-economic development due to various activities or initiatives they undertake in their countries of incorporation. Among the broad range of corporate activities, political expenditure has emerged as a new trend through which companies advance socio-economic development. Whilst there have been mixed reactions to companies availing financial resources to support political objectives, this article submits that, for South Africa, corporate political expenditure is an effective way for the country’s business entities to participate in nation-building, provided the practice is adequately regulated. With reference to developments in other jurisdictions, the article proposes a model to provide a starting point for the regulation of corporate political expenditure under South African company law.
Highlights
Despite South Africa having attained a celebrated democracy, the private funding of its political parties remains an ambivalent[1] subject
This occurs despite the Johannesburg Stock Exchange Limited having adopted a Social Responsibility Index[54] for listed companies, requiring them to report on their adjudication of corporate political spending as an element of stakeholder governance.[55]
The mandate assigned to the Social and Ethics Committee in terms of South African company law qualifies it as a key body to monitor the adjudication of corporate political donations
Summary
Companies have become catalysts of socio-economic development due to various activities or initiatives they undertake in their countries of incorporation. Among the broad range of corporate activities, political expenditure has emerged as a new trend through which companies advance socio-economic development. Whilst there have been mixed reactions to companies availing financial resources to support political objectives, this article submits that, for South Africa, corporate political expenditure is an effective way for the country’s business entities to participate in nation-building, provided the practice is adequately regulated. With reference to developments in other jurisdictions, the article proposes a model to provide a starting point for the regulation of corporate political expenditure under South African company law
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