Board of directors Flashcards
who is a director
definition can be found in s1 and S66 of the Act - member of the board , alternate director of the company and includes an person occupying the position of director by whatever name designated
what are ex officio members of the board
people who hold office as the director of a company because they hold another office or have some other status designated in the MOI
who are “all members of the board contemplated in S66”
directors appointed by a person designated in the MOI
what are alternate directors
a person elected or appointed to serve as the occasion requires , as a member of the board of a company in substitution for a particular elected or appointed director
who are directors elected by the shareholders
S66 (4) tells us that at least 50% of the board must be elected by the s/hs
what is a de jure director
lawfully and properly appointed to the office of director and at the time in question, still in office (can be any type of director)
what is a de facto director
persons not lawfully in office at the time in question, they act substantially as directors - a person “occupying the position of director”
what is the restricted view of a de facto director?
limited to persons who the company attempted to appoint but then failed to do so effectively due to some irregularity and persons who were properly and legally appointed but whose office had ended at the time in question.
what is the broader view of a de facto director
includes any person who substantially acts as a director would, despite the fact that the company might never have attempted to appoint the person as a director
what is a nominee director
directors who were nominated by someone else
what is a puppet director
a person placed on the board with the idea that they will follow the instructions of another blindly - the puppet director will not be able to avoid liability as they are bound by their duties to the company
shadow directors
no SA definition but Eng definition says it is a person who in accordance with whose directions or instructions the directors of the company are accustomed to act - someone calling the shots from the shadows - someone superior who instructs directors
Hydrodam requirements for a shadow director
- directors
- directed to act in specific way by shadow
- directors acted in accordance
- they were accustomed to acting in accordance
what is a prescribed officer
a person who performs a specific function designated by the minister in S66 (1) within a company - precise meaning is unclear
who are the company’s first directors?
its incorporators who serve as directors until the minimum number of directors in the MOI or Act have been appointed
what does S66 (4) (i) allow for
subsequent directors to be elected by shareholders of a person that is designated in the MOI
what did the Kuwait say about s/h electing directors
The s/h who elects the director has no duty to see that the directors discharge their duties diligently and competently
is a third party allowed to appoint a director
yes - nominee directors
are third parties under an obligation to ensure that they appoint the most suitable person for the position
no
what section regulates the process for s/h electing directors
S68
how many directors must be appointed by the s/h in a profit company
at least 50%
can a shareholder vote for a director in his or her own interests
yes they can, the s/h do not owe the company any fiduciary duties or duties of care and skill
what is an ex officio director
a director in their official capacity - a person who holds office as a director because they hold another position in the company i.e CEO, CFO
why are ex officio directors tricky for labour law
they act as a director and an employee
what did the Mampeule case say about directors
executive director and member of board = 2 distinct positions, if the director of the company is also an employee this is a sep contract which may not be contained in the MOI
how are directors different to agents
they have similar functions i.e they act on behalf of someone else and do not incur liability when acting on behalf of that thing but S66 gives directors powers that only apply to directors
how are directors different to trustees
they both have fiduciary duty but with a trustee the property vests in his capacity as such, the company’s assets belong to the company and not the director
how is a director different to a managing partner
directors do not have a financial stake or interest in the business
how can a director’s legal position be described
as sui generis
what does the act tell us about the composition of the board
very little, we just know that there must be 1 director in a private company and at least 3 in a public company - there is no maximum
does the legislation differentiate between executive and non executive directors
no this is an industry term which differentiates between directors who involved in day to day business and directors who are not.
what does a non -executive director do
exercises an oversight function
what does the king IV require
independent non -exec directors - the majority of the board must consist of them and recommends that the chairperson should be an independent non-exec director
what does the act say about board committees
gives the board the authority to appoint committees but it does not prescribe exactly how the committees should function
what mandatory committees must the board have
Public companies and private companies with a public interest score exceeding 350 must appoint a
- audit committee
- social ethic committee
what does S72 (1) say about committees
the board can delegate the authority of a board to a committee in matters referred to it
can the board abdicate its responsibilities by appointing a committee
no
