Tag: fiduciary duty

Conversations on board leadership often focus on strategy, oversight, and navigating risk and uncertainty. These remain timeless pillars of effective governance. At the same time, these discussions highlight that strong boards are vital for steering organisations through complexity while upholding fiduciary duties.

It’s often said there are three tiers of government in South Africa: national, provincial and municipal. However, there is an unspoken fourth tier, namely residential governance through Homeowners Associations (HOAs). On paper, HOAs appear straightforward.

Digital governance frameworks are needed to address disjointed oversight and enhance decision-making in today’s complex corporate environments. Despite public outcries about corruption and demands for accountability, the importance of good corporate governance continues to be trivialised.

While the position of Company Secretary has always been important within an organisation, especially from an administrative perspective, the Company Secretary’s role and scope of responsibility has grown over the years from an ‘efficient administrator’ to a ‘governance leader’.

Chief Financial Officers (CFOs) not only have a serious fiduciary duty to themselves as individuals, but they also have a responsibility to their employer to ensure that every step of every financial process is in order and above board. The consequences of financial mismanagement are multiple – again, individually as well as for the company.

South Africa has been enlisted on the Financial Action Task Force’s (FATF) dreaded “Grey List” for over four months – fortunately, though, the country has not been standing still. Significant new provisions are shaking up the corporate landscape and by comprehensively implementing stricter controls, the country can transition more quickly from the Grey List to the coveted “Whitelist.”

A recent tweet made by a director of Cricket South Africa relating to a cancelled sponsorship highlights an issue for South African boards: the risk represented by social media. Social media has become a key communications channel, but poses particular risks for organisations and especially their directors.

The furore around the awarding of a contract to a politically connected individual’s company shows that government has not yet accepted its role as custodian of good governance for South Africa Inc, and the extent of public disenchantment with perceived corruption.

On March 12, 2020, a plaintiff shareholder filed a securities class action lawsuit against Norwegian Cruise Line Holdings, alleging that the company was employing misleading sales tactics related to COVID-19 bookings and cancellations. Another D&O claim was lodged soon after against Inovio Pharmaceuticals relating to statements the company made about developing a vaccine for COVID-19.

Cyber risks are evolving on a near daily basis posing countless threats to companies, and accordingly, directors need to stay abreast of legal developments to protect themselves and their companies in their fiduciary duties.