An overview analysis of the challenges posed by the COVID-19 pandemic on shareholder activism in South Africa

Abstract

The article unpacks the effects of the corona virus (COVID-19) pandemic on shareholder activism in public companies in South Africa. In this regard, the adequacy of the relevant provisions of the Companies Act 71 of 2008, that indirectly deal with shareholder activism is discussed in the context of the COVID-19 pandemic challenges. Accordingly, challenges that affected the promotion of shareholder activism during and post-COVID-19 pandemic such as COVID-19 pandemic restrictions challenges; the lack of a comprehensive legal framework for shareholder activism in South Africa; inconsistent enforcement of alterable provisions during electronic shareholder meetings; shareholder salience challenges; shareholder passivity; and the adoption of flawed measures to promote shareholder activism are examined. Thereafter, the measures adopted to mitigate the effects of covid-19 on shareholder activism in South Africa, especially during virtual meetings and electronic voting are explored.