A Critical Analysis of the Protection of Stakeholders ’ Interests under the South African Companies Act: (Part 2)

While the Companies Act 71 of 2008 does not provide for an explicit duty for directors to consider the interests of stakeholders, it may appear as if the shareholder value approach has become significantly more nuanced through the operation of other company law principles, such as the business judgment rule, the requirement for the appointment of a social and ethics committee, the remedies and the provision for the Memorandum of Incorporation as well as the link between governance and the law. This paper provides a critical analysis of these company law principles. The aim is to investigate to what extent these company law principles can be relied on as a means of guaranteeing the protection of stakeholders ’ interests. The paper concludes that stakeholders ’ interests are best protected where an explicit duty exists for directors to consider the interests of other stakeholders. A call for law reform is therefore made in this regard