Companies Act duties, held where the board can see them
The Companies Act codified what directors owe the company and attached personal liability to getting it wrong. It also created the social and ethics committee and the public interest score that determines how much assurance a company needs. Dimeri tracks each of those as a standing obligation rather than an annual scramble.
What the Companies Act requires
The Companies Act 71 of 2008 replaced the 1973 Act and changed the character of South African company law. Where the old Act was largely procedural, the new one codified directors duties, introduced a solvency and liquidity test that governs most distributions, created a statutory business rescue regime, and tied the level of assurance a company needs to a calculated public interest score rather than to its legal form.
For a governance function, four areas do most of the work. Sections 75 to 77 set out directors duties: disclosure of personal financial interests, the standard of directors conduct including the duty to act in good faith and in the best interests of the company, and personal liability for loss caused by breach. Section 72 read with regulation 43 requires a social and ethics committee for state owned companies, listed public companies and any company that has scored above the prescribed public interest threshold in any two of the previous five financial years. Regulations 26 to 28 use the public interest score to determine audit and independent review requirements and the applicable financial reporting standard. Section 24 sets record keeping obligations, and section 4 carries the solvency and liquidity test.
What ties these together is that they are continuous rather than annual. A director's interests change during the year. The public interest score moves with employee numbers, turnover, third party liabilities and beneficial holders. A distribution requires a solvency and liquidity assessment at the time it is made, not at year end. Treating them as annual items is how companies find out late that a committee should have existed for the past two years.
The obligations Dimeri tracks
Dimeri holds the Companies Act duties on their own cycles, with the calculations and declarations that drive them kept current.
Disclosure of personal financial interests
Directors and prescribed officers must disclose personal financial interests in matters before the board, and recuse themselves where required.
- Standing declarations held per director with dates
- Matter specific disclosures captured at the meeting
- Recusals recorded in the resolution
- Annual refresh cycle with reminders
Standards of directors conduct and liability
The duty to act in good faith, for a proper purpose and in the best interests of the company, with the care, skill and diligence expected, and personal liability where that is breached.
- Board decisions recorded with the information relied on
- Business judgement support evidenced at the time
- Director induction and ongoing training tracked
- Indemnity and insurance position recorded
Social and ethics committee
Required for state owned companies, listed public companies and companies meeting the public interest score threshold, with a prescribed set of monitoring functions.
- Applicability assessed from the public interest score
- Committee composition and charter held
- Prescribed monitoring areas tracked as obligations
- Annual report to shareholders assembled from live data
Public interest score and assurance
A score calculated annually from employees, turnover, third party liabilities and holders of beneficial interest, determining audit or independent review and the reporting standard.
- Score calculation held with its inputs and workings
- Assurance requirement derived and flagged on change
- Reporting standard applied recorded
- Multi year history showing threshold crossings
Solvency and liquidity
The test that governs distributions, financial assistance and several other corporate actions, applied at the time of the decision.
- Assessment recorded against each qualifying decision
- Supporting financial information attached
- Board resolution linked to the assessment
- Register of qualifying transactions maintained
Records and access
Company records maintained for the prescribed periods, with the access rights the Act gives to shareholders and others.
- Record categories and retention periods held
- Registers maintained and reviewed on a cycle
- Access requests tracked with their deadlines
- Disposal evidenced at the end of retention
How Dimeri covers Companies Act
The Companies Act, King V and the JSE Listings Requirements ask overlapping questions about the same board. Dimeri answers them from one record.
The public interest score kept live
The score is recalculated from its inputs rather than recomputed once a year from memory. When a threshold is about to be crossed, the change in assurance and committee obligations is flagged before it becomes a historical problem.
Declarations that are current
Director interest declarations run on a refresh cycle with reminders, and matter specific disclosures are captured with the resolution they relate to, so the register reflects the position on the day a decision was taken.
Social and ethics work that is monitored
The committee's prescribed monitoring areas are held as obligations with owners and evidence, which is what turns the annual report to shareholders into a summary of work done rather than a description of a mandate.
Shared credit with King V
Conflict declarations, committee governance and board effectiveness serve both the Companies Act and King V disclosure. Record the practice once and both views reflect it.
Getting Companies Act coverage in place
- 1
Establish applicability
The public interest score is calculated from current inputs, which settles whether a social and ethics committee is required, whether an audit or independent review applies, and which reporting standard is in play.
- 2
Load the board and its structures
Directors, prescribed officers, committees, charters and delegations are recorded, together with the current declarations and the cycle on which they refresh.
- 3
Attach the standing obligations
Social and ethics monitoring areas, record retention, register maintenance and the solvency and liquidity workflow are set up with owners and schedules.
- 4
Report from the record
The social and ethics committee report, board papers and King V disclosures are drawn from the same underlying evidence, so they cannot tell different stories.
Companies Act questions
Do we need a social and ethics committee?
Section 72 read with regulation 43 requires one for state owned companies, listed public companies and any company that has scored above the prescribed public interest threshold in any two of the previous five financial years. Because the score moves with employees, turnover, third party liabilities and beneficial holders, companies can become subject to the requirement without noticing. Dimeri tracks the score across years so a threshold crossing is visible.
What is the public interest score?
It is a number calculated annually under the Companies Regulations from the average number of employees, third party liabilities, turnover and the number of individuals with a beneficial interest in the company's securities. It determines whether an audit or an independent review is required, which financial reporting standard applies, and it feeds the social and ethics committee test. Dimeri holds the calculation with its inputs so the result can be checked.
How does the Act interact with King V?
The Act sets legal minimums; King sets governance expectations that generally go beyond them. Directors duties under sections 76 and 77 and the King principles on ethical and effective leadership cover much of the same ground from different directions. Dimeri records the underlying practice once and reflects it in both views.
Does Dimeri handle CIPC filings?
No. Dimeri tracks the obligations, the deadlines, the ownership and the evidence. The filings themselves are made through CIPC and your company secretarial provider. What Dimeri prevents is a filing obligation being missed or a supporting resolution being unfindable.
Is this a substitute for legal advice?
No. The Companies Act has been amended since 2008, including by the Companies Amendment Acts, and applicability turns on facts specific to your company. This page describes how Dimeri structures the obligations. Your legal advisers should confirm what applies.
Go further on Companies Act
Put Companies Act on one register
Every requirement mapped to a control with a named owner, the evidence held against it, and one view of where you stand.