Abstract:
Corporate governance is a broad concept and includes not only the common-law
and statutory duties of directors, but also refers to the codes of practice of various (usually extra judiciary) entities (see generally on corporate governance and
its regulation Du Plessis, Hargovan and Bagaric Principles of contemporary
corporate governance (2011) 156 ff and Naidoo Corporate governance (2009)
27ff). The difference between these two meanings is that the former includes
possible liability under the law for non-compliance, while the latter implies what
it says, namely, it is a recommendation and non-compliance will result in “sanctions” other than direct liability. In a recent South African case the court referred
to principles of good governance and it would appear that these principles
(which are not contained in legislation or which are not mere restatements of
common law principles) are not always mere recommendations. Instead, directors may have to adhere to these recommendations to prevent liability for breaching their legal duties.
