Browsing by Author "Idensohn, Kathleen"

Now showing 1 - 4 of 4
  • No Thumbnail Available
    Item
    Open Access
    A critical analysis of the Ugandan Companies Act, 2012, in the search for an appropriate legal framework for small and closely-held companies in the light of the experiences of South Africa and the United Kingdom
    (2024) Engoru, Ivan; Idensohn, Kathleen; Yeats, Jacqueline
    This study set out to determine whether the Ugandan Companies Act, 2012 (‘CA 2012') provides an appropriate and effective legal framework for small and closely-held companies (‘SCHCs'). In this study, SCHCs are small owner-managed companies with one or a few members with close relations who are usually natural persons. The study focus follows from a recognition that companies' legislation in Uganda is complex and makes little attempt to provide simple, flexible and accessible law for the operations of SCHCs. Although this gap was highlighted during the enactment of CA 2012, it had also characterised previous companies' legislation in Uganda. The expectation was that CA 2012 would address this gap. However, there is doubt if this has been achieved. To be sure, what amounts to simple, flexible and accessible legislation for SCHCs is not obvious. However, a look at the relevant legislation in the comparable jurisdictions of South Africa and the United Kingdom suggests that SCHCs require special recognition and treatment in legislation in the areas of audits; financial reporting; limitation of membership; restriction of members to natural persons; and clear optional provisions. This can be achieved through a distinct corporate form in terms of a separate and distinct legislation for SCHCs or by treating SCHCs as private companies under a single company law statute, but with flexible provisions. In discharging this task, the study examines the various business forms under CA 2012 (ss 2, 4 and 5), and the corporate governance framework (ss 14, 138, 154, and 167). Through doctrinal analysis, it employs the evaluative framework of fewer reporting obligations; limiting membership in SCHCs to natural persons; limiting members who are also usually in management; and clear elective or optional provisions for SCHCs in areas such as company meetings and audits, as best practice on the regulation of SCHCs. The study draws on the experiences of South Africa under the Close Corporations Act 69 of 1984 (‘CCA 84') and South African Companies Act, 71 of 2008 (‘CA 2008'); and the UK's Companies Act, No. 46 of 2006 (‘CA 2006') as comparable jurisdictions; and the application of common law in companies' legislation. In the latter, I examine specifically the common law concept of quasi-partnership companies, and its' utility in the SCHCs category, and codification of common law in companies' legislation, as a growing drafting style. I draw some lessons from the UK and South Africa. The key arguments in this study are that first, the business forms and legal categories under CA 2012 do not align with the known legal definition or 2 characterisation of SCHCs. They are classified along the traditional lines of private versus public or unregistered versus registered companies. The single member company (‘SMC') is a new concept in Uganda's company law and is exclusive to single members. This does not cater for SCHCs. Second, the Code of Corporate Governance (‘CoCG') (s 14), although optional for private companies, contains complex concepts which are inapplicable to SCHCs. Thus, CoCG's significance to SCHCs' corporate governance needs is doubtful. Thirdly, the requirements for accounts reporting (s 154) and audit (s 167) are mandatory for all companies irrespective of their size or type. These provisions are elaborate with prescribed formats. Subjecting SCHCs to the same regulatory requirements as the other companies is burdensome and contrary to best practice. Finally, the comparable jurisdictions of the UK and South Africa have codified aspects of common law by way of a restatement of the law in their respective companies' legislation. A restatement serves two purposes. First, it directly integrates common law into statute; and second, affords the courts the flexibility to fill gaps that may exist in statute. This study contends that this tool (also loosely referred to as ‘codification') has not been well utilised in CA 2012 with respect to SCHCs. The study concludes that CA 2012 does not provide an appropriate and effective legal framework for SCHCs. Consequently, in keeping with best practice on the regulation of SCHCs as can be seen in comparable jurisdictions of South Africa and the UK, the study proposes amendments to ss 2, 4, 5, 138, 154, and 167 of CA 2012 to provide for the special regulation of SCHCs either (a) by creating a new type of company and rendering it subject to separate regulatory provisions or (b) to a ‘reduced' version of the regulatory provisions applicable to other companies; or by continuing to treat SCHCs as private companies and rendering them subject to a ‘reduced' version of the regulatory provisions applicable to other companies. To give effect to these proposals will require: (1) merging SMC with other smaller companies whose members do not exceed ten to create SCHCs founded on partnership principles; (2) inserting a chapter in CA 2012 with clear provisions which apply to SCHCs; (3) restricting membership of SCHCs to natural persons; and (4) inserting a general statement of purpose by way of a substantive provision in CA 2012 to the effect that in its interpretation the common law shall apply as a direct way of integrating the common law in CA 2012, as other jurisdictions have done. The study provides in Appendix B a Schedule of the proposed amendments and their justification to aid policy reforms and the review of CA 2012 with respect to SCHCs in Uganda.
  • Thumbnail Image
    Item
    Open Access
    The basis and boundaries of employee fiduciary duties in South African common law
    (2015) Idensohn, Kathleen; Rycroft, Alan
    The nature and potential application of the common-law fiduciary doctrine, and of the distinctive nature of the duties to which it gives rise, is seldom appreciated or analysed in South African law. This is particularly evident in the law of employment, where the courts’ references to the ‘fiduciary’ nature of employment and the ‘fiduciary duties’ of employees have often been ambiguous, confused and unprincipled. In addition, there is almost no reference to employee fiduciary duties in the general literature on South African labour and employment law and, even where these duties are (briefly) mentioned, they are not acknowledged as being in any way separate or distinct from the employee’s other duties to the employer. This contrasts noticeably with other Commonwealth jurisdictions, where fiduciary duties form the basis of increasing numbers of cases, and are well-established and extensively debated aspects of the general jurisprudence, both generally and in relation to employees. This thesis critically explores and advances certain propositions about the general theoretical nature of the South African common- law fiduciary concept and the principles that govern the incidence, nature, purpose, scope and operation of fiduciary duties, with comparative reference to the positions in English and Canadian law. The first six chapters provide a critical analysis of those general propositions and principles. They also locate them and the debates that surround them within their broader legal and theoretical context. Chapter 7 considers their application to relationships of employment in order to determine the basis and boundaries of the fiduciary duties of employees (as ‘ordinary’ employee and in certain other established ‘fiduciary’ capacities commonly associated with employment) in terms of South African common law. In particular, the chapter considers when those duties will arise, their scope of application, what they require of the employee, and how they differ from other employee duties. Chapter 8 considers the broader issues of whether all relationships of employment are inherently and necessarily ‘fiduciary’ ones and whether they ought generally to be classified as a class of ‘fiduciary relationship’. The final chapter critiques the current position in South African law on these matters. It also suggests a set of fiduciary principles and propositions for the future application and development of fiduciary duties, both generally and in relation to employment, that are theoretically sound, clear, coherent and, where appropriate, consistent with contemporary jurisprudence in other comparable jurisdictions.
  • No Thumbnail Available
    Item
    Open Access
    Protecting South African companies against cybercrime: a critical analysis of the directors? duty of care in relation to cybersecurity and the use of artificial intelligence to protect companies? online meetings
    (2023) Kritzinger, Julian; Idensohn, Kathleen
    South Africa (SA) has one of the highest rates of cybercrime in the world and SA companies' cyberassets are vulnerable to cyberattacks. Since SA companies' online meetings (OMs) are conducted on an online platform and use online databases that contain sensitive Personally Identifiable Information (PII), they are particularly prone to cyberattacks. Artificial Intelligence (Al) could however be used to resist cyberattacks on a company's cyberassets, such as its online platform and its online databases. Contrariwise, AI could be used by cybercriminals to instigate cyberattacks. This thesis will critically analyse how a more detailed treatment of the directors' duty of care in relation to cybersecurity can help to make SA companies more cyberresilient, with the specific focus on their OMs, as well as the role that the use of AI can play in this regard, and how it should be regulated? Where other researchers looked at OMs as a means to enhance corporate governance and corporate social responsibility (CSR), they have failed to look at the dangers that cybercrime present to OMs and that directors may be held personally liable in the event that a company's cybersecurity was inadequate to thwart a cyberattack and the company's cyberassets were compromised. By means of legal comparison, this thesis critically analyses how directors need to exercise their duty of care in relation to cybersecurity in order to help make SA companies more cyberresilient, and will argue for directors' use of Al as a tool to help resist cybercrime, and its regulation. This thesis mounts the challenge of SA cybercrime by firstly looking at how OMs and the duty of care in relation to cybersecurity are regulated in different jurisdictions, and how corporate governance and CSR should include AI, while it also looks at directors' exposure to liability in terms of the use and regulation of AI. It is submitted that the SA Cybercrimes Act 19 of 2020 and the King Code should be updated to include the use of Al, since it is an important tool for directors in the fight against cybercrime.
  • Thumbnail Image
    Item
    Open Access
    The ownership and control architecture of South Africa's state-owned companies and its impact on corporate governance
    (2021) Thabane, Tebello; Ncube, Caroline; Idensohn, Kathleen
    The thesis examines the ownership model and various control arrangements of state-owned companies (SOCs) to establish how the division of corporate power between the boards of directors and shareholder-representatives and the exercise of corporate power by these organs impact corporate governance. The thesis makes several claims. First, it argues that the architecture of ownership and control is not underpinned by a sound theoretical base and lacks a clear and consistent economic and political logic. Second, the motivations for state ownership are vague and contradictory, resulting in an irrationally amorphous ownership model. Third, shareholder control powers are excessive, often abused, and lead to shareholder proximity to the locus of governance, which engenders interference and erodes boards' autonomy and authority to govern effectively. Fourth, the legal and regulatory regime governing SOCs is plural, complex, fragmented, and contradictory. Collectively, these and other conceptual flaws have an adverse impact on governance. To address the flaws, the true nature and role of SOCs as entities of a special kind designed to fulfil an overarching public interest mandate need to be reimagined. To realise the public interest mandate, SOCs must be governed in the public interest. This has several aspects. The first is the truncation of excessive shareholder powers and the elimination of interference by removing SOCs from direct political control and placing them under an independent and professional shareholder entity akin to Singapore's state holding company, Temasek. The second aspect is a rethink and expansion of the duties of SOCs' directors by introducing a novel duty to act in the public interest, in addition to their traditional duties. The third aspect is that the legal and regulatory framework must be de-layered, responsive, and complementary to accommodate and give impetus to the public interest approach to corporate governance. Ultimately, these changes must culminate in a nuanced and bespoke architecture of ownership and control that is minimalist and structured and that can, arguably, address the idiosyncratic governance challenges that confront South African SOCs.