Summary Corporate Governance in South Africa – Exam Pack

,Contents
INTRODUCTION ................................................................................................................................................................ 3

LEGISLATIVE FRAMEWORK .............................................................................................................................................. 6

THE ROLE OF THE BOARD OF DIRECTORS IN CORPORATE GOVERNANCE .................................................................. 9
INDIVIDUAL DIRECTORS AND CORPORATE GOVERNANCE ......................................................................................... 12

THE DUTIES & LIABILITIES OF DIRECTORS .................................................................................................................... 15

THE ROLE OF SHAREHOLDERS IN CORPORATE GOVERNANCE .................................................................................. 20

THE GOVERNANCE OF RISK........................................................................................................................................... 24

CORPORATE ETHICS ...................................................................................................................................................... 30

CORPORATE SOCIAL RESPONSIBILITY ......................................................................................................................... 34

RESPONSIBLE INVESTING .............................................................................................................................................. 39

ASSURANCE ................................................................................................................................................................... 43
REPORTING & DISCLOSURE .......................................................................................................................................... 47

CONCLUSION ................................................................................................................................................................. 51




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, Disclaimer
These notes were compiled using the STADIO 2025 01 CGE101 study guide, Corporate Governance in South Africa with
International Comparisons 2nd Edition textbook and the notes taken from the tutorial sessions offered by STADIO.

When utilising this information for any purpose that requires referencing, the following sources are where I obtained this
information:

Weise. T. 2017. Corporate Governance in South Africa with International Comparisons. 2nd ed. Cleremont: Juta and
Company (Pty) Ltd

&

Benadie, J., 2025. Krugersdorp, School of Administration and Management, STADIO (formerly SBS).

Please DO NOT cite or reference my notes as this is what I summarised and understood from reading, lectures and
tutorials I attended. The purpose of these notes is to assist in gaining an understanding for the module and assisting you
the way that the information assisted me in preparing for examinations.

Please do not distribute this document or try and sell it as your own work. It took many hours of hard work to compile and
format this pack and I would appreciate not seeing my notes on the groups.

Thank you for your support!




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, Introduction
Chapter 1

Definition of Corporate Governance
Narrow Definition

- Corporate governance originally focused on the separation of ownership and control.
- Ensures managers act in the best interests of shareholders.
- Defined as the practice by which companies are directed and controlled.

Wider Definition

- Modern perspective includes all stakeholders affected by corporate activity.
- A system for regulating corporate conduct, ensuring:
o Responsible behaviour.
o Balancing stakeholder interests.
o Achieving efficiency and profitability.
- Key Aspects:
o Oversight and control of management.
o Stakeholder consideration.
o Ethical, responsible corporate behaviour.
o Efficiency and profitability.
o Compliance, risk management, checks and balances.
o Transparency and accountability.

Objectives of Corporate Governance
Core Objectives

- Corporate governance is strategic and board-driven, distinct from operational management.
- Objectives include:
o Ethical leadership and strategic oversight.
o Risk identification and management.
o Legal and ethical compliance.
o Sustainability and long-term thinking.
o Transparent disclosure of information.
o Accountability to stakeholders.

History and Evolution of Corporate Governance
Historical Context

- Origins: UK Joint-Stock Companies Act of 1844 laid the foundation for modern corporate structures.
- 20th Century: Growth of large corporations led to separation of ownership and control.
- Berle & Means (1932): Highlighted risks of unchecked corporate power.
- Corporate Scandals: Maxwell Group (UK), Enron, and WorldCom exposed governance failures, catalysing global
reform.

Response: Rise of Governance Codes

- International frameworks emerged, including:
o UK Cadbury Report (1992).
o UN Global Compact.
o OECD Principles of Corporate Governance.
o ICGN Global Governance Principles.
o National codes in Brazil, China, UK, USA, etc.

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