The responsibilities of the board of directors in promoting the principles of corporate governance
Master Thesis
2014
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University of Cape Town
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Abstract
Corporate governance is an important aspect of the way in which companies do business. It regulates the conduct of those in control of the corporation. An important aspect of corporate governance is the establishment of structures and processes that enable directors to discharge their legal responsibilities. The global financial crisis raised many corporate governance issues and this led to many reviews and changes to corporate governance systems worldwide. This is the main reason for this research. This dissertation will focus on these reviews and changes in the corporate governance systems of South Africa and the United Kingdom. The recent collapses of high profile companies, for example, Enron and WorldCom in America, Parmalat in Italy and Masterbond, Saambou and Fidentia in South Africa have resulted in the actions, skill and diligence of directors to again come under strict inspection. Companies and especially directors have to realise that they do not act independently but that their actions and decisions impact on the societies and environment in which they operate. This is the main problem in this dissertation. The new Companies Act 71 of 2008 incorporates into statute for the first time issues of corporate governance. Company law sets the framework in which the company operates and the recommended practices set out in the King Report on Governance for South Africa 2009 (‘the King III Report’) and the King Code of Governance for South Africa 2009 (‘the Code’) provide guidance for directors as to how they should direct the business of the company and make decisions on behalf of the company. In this sense, the Companies Act of 2008 and the King III Report and the Code complement each other. The King III Report and the Code deal broadly with the responsibilities of the board of directors. The Report confirms that it is for the board of directors to act as the focal point and custodian of corporate governance. This dissertation is in essence an examination of the responsibilities of the board of directors to promote the principles of corporate governance and recommendations in terms of the King III Report and the Code.
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Includes bibliographical references.
Reference:
Parry, W. 2014. The responsibilities of the board of directors in promoting the principles of corporate governance. University of Cape Town.