Join us for an insightful and empowering morning.
A unique opportunity to deepen your understanding of director responsibilities in the ever-evolving landscape of corporate governance.
The event opens with an engaging fireside chat featuring Nonkululeko Gobodo, South Africa’s first black female Chartered Accountant and a trailblazer in leadership and business. Her journey and perspective will offer powerful reflections on ethical leadership, accountability, and the practical realities directors face in today’s boardrooms.
Following the chat, prepare for a high-impact masterclass with Happy Masondo,
respected non-executive director and governance expert.
This session will unpack key aspects of the South African Companies Act, including Sections 75, 76, and 77. Topics will include managing conflicts of interest, upholding standards of conduct, and understanding potential liabilities — all essential for directors, executives, and governance professionals committed to responsible leadership.
Whether you’re a seasoned board member or a rising executive, this event offers invaluable guidance to help you lead with integrity and confidence.
Don’t miss out. Register now to secure your place at this essential governance event!
The turning point for me was taking a gap year and working at my father’s panel beating business. It was there that I experienced a practical form of intelligence and strength that wasn’t academic, something my mother valued highly. This hands-on experience made me realise, “Oh, I’m not this thing that I always believed I was. I’m actually smart, I’m actually even strong, even if I’m quiet.” This awakening, this understanding that I wasn’t defined by others’ perceptions, fundamentally changed my life. It was the moment I woke up to the fact that “I’m not what they said I was.”
Having a vision for my life, though it sounds like a cliché, was the core driving force behind everything I achieved. Growing up in a society that subtly or overtly tells you who you are and how far you can go ignited a rebellious spirit within me. My vision, from my first year of articles, was to have my own firm one day. This ambition fuelled my determination to seek the best training and create opportunities for myself. It was about proving to myself and to others that as a Black woman, there was nothing I couldn’t do. Life, I believe, will always push you towards your vision, and that inner drive helped me navigate fear and external doubts when starting my company and facing competition.
While formal mentorship wasn’t as structured early in my career, I recognise now that I did have mentors and sponsors. My parents were my main mentors, instilling in me a belief that there were no limitations on what I could achieve. Later, a partner at KPMG, Doug Southgate, saw my potential, nurtured it, challenged me, and ultimately sponsored my partnership. The environment I grew up in, with Black professionals and businesspeople around me, also served as a form of inspiration and a “lighthouse” showing me what was possible. For young professionals, I would advise that you earn sponsorship by being mindful of your ambitions and values and by taking yourself seriously through your actions, not just words. Be proactive in your development, as those who are not visible are unlikely to be mentioned in decision-making rooms.
Starting Gobodo Incorporated was deeply rooted in the desire to prove that we, as Black accountants, deserved to be at the centre of our profession and the economy, not at the fringes. It was about seizing the opportunities presented by a changing South Africa in 1994. There was a strong motivation to challenge the narrative that Black individuals and firms were inherently small and incapable of big things. While financial success was a factor, the driving force was this rebellion against societal limitations and a determination to build something significant. To overcome the fears of others, including my parents, I had a deep-seated belief in my vision and a willingness to take risks. I recognised that youth afforded me the resilience to face challenges head-on, and once committed, there was no option but to make it work.
I’ve always believed in never being satisfied and constantly seeking the next challenge. By the time of the merger negotiations, Kobodo Incorporated had grown significantly, and I felt ready for a new level of complexity and impact. While the lawyer advising us suggested starting with the name, we initially prioritised shared history. However, the name became a point of contention towards the end. My Kobodo partners wanted to honour the fact that I was the last remaining founder, while the other firms also wanted their names prominent. As a leader, I recognised that division over such an issue could jeopardise the entire merger, which I believed was bigger than my individual ego. Therefore, I made the decision to propose a name that ultimately allowed the merger to proceed. This experience reinforced my leadership philosophy that providing vision and direction often requires prioritising the greater good over individual desires, especially to avoid black people fighting over small things and missing the bigger picture.
My commitment to ethical leadership and values is non-negotiable and stems from a deeply personal conviction. I’ve worked hard to build my reputation and I refuse to compromise it for anyone or anything. I am very careful about the board positions I accept, always doing my homework on the key individuals – the Chairman, CEO, and CFO – and ensuring a comfortable alignment of values. During board interviews, I make it clear that I am not interested in token appointments for BEE score purposes. I operate with a strong personal “red line,” and any situation that asks me to compromise my integrity or ethics will lead me to step away. I believe in being known for standing by my values to such an extent that unethical behaviour is not even considered around me. Establishing and embedding strong values within Kobodo Incorporated was crucial to insulate the business from the pervasive culture of corruption and greed, even to the point of letting go of talented individuals who didn’t adhere to these values.
My message to young Black female accountants is to wake up to who you are, to dream big, and to prepare yourselves diligently for your future. The world is undergoing significant changes, particularly for women, and we cannot afford to be left behind. Be aware of the historical patterns of social and economic shifts that have previously excluded marginalised groups. Recognise that while progress is being made, ingrained biases persist, requiring you to often work harder to prove your capabilities. Resist the temptation to dim your light or abandon your authentic self to fit in, as bringing your true self often earns respect. Understand that your opinions and worth are not defined by others’ potentially biased perceptions. By collectively waking up to our power and potential, and by bringing our full selves to every situation, we can drive meaningful change towards equality, not just for ourselves but for the betterment of the economy and future generations. Stop enabling systemic issues and be proactive in creating the change you want to see.
Choosing to pursue my ambitions after my divorce, while being a single mother of three, was an incredibly difficult decision with significant consequences for my children. There were many tearful nights spent away from them as I built Kobodo Incorporated. My children paid a price for those choices, and the wounds were deep. However, I was always a conscious parent, determined to raise them to be independent and capable. Looking back now, seeing them as well-adjusted adults living their own lives and having had a role model who dared to dream big, I believe that, on the balance of probability, I made the right decision, even for them. This experience highlights the often harsh realities and difficult choices women face when striving for professional success. There is often a price to pay, and it’s crucial to acknowledge the sacrifices made and the impact on loved ones. While the ideal of perfect balance is elusive, being conscious, present, and striving to prepare your children for their own roles in life can help navigate these challenging trade-offs.
Directors in South Africa owe significant fiduciary duties to the companies they serve. These are the highest legal obligations and include the duty of good faith, the duty of loyalty, and the duty of care. The duty of good faith requires directors to act honestly and for a proper purpose. The duty of loyalty means their focus must be on the best interests of the company, overriding personal interests or the interests of specific individuals or groups like the C-suite, fellow board members, the chairperson, shareholders, or other stakeholders. The duty of care necessitates that directors exercise reasonable care, skill, and diligence in carrying out their responsibilities, including being informed, applying their skills, and ensuring decisions are considered diligently. These duties are enshrined in the Companies Act 71 of 2008, particularly in sections 75, 76, and 77.
Acting in the “best interests of the company” is the paramount consideration for a director. This means that when faced with any decision or action, a director’s singular focus must be on what benefits the company itself as a separate legal entity. This duty overrides the director’s own personal interests, the interests of the company’s management (C-suite), fellow board members, the chairperson of the board, the shareholders, or other stakeholders. The foundational question a director must continually ask is: “Is this decision/action/transaction in the best interests of the company?” If the answer is yes, that is the direction the director should take. While decisions made in the company’s best interests may ultimately benefit stakeholders and shareholders, these secondary benefits are a consequence of the primary duty to the company itself.
The Business Judgment Rule, codified in Section 76(4) of the Companies Act, is a legal principle that aims to protect directors from personal liability for business decisions made in good faith and on an informed basis. It operates as a rebuttable presumption that when making a business decision, a director acted with reasonable diligence to become informed, without material personal financial interest (or with proper disclosure under Section 75), and had a rational basis for believing, and did believe, that the decision was in the best interests of the company. If these conditions are met, a director will generally be considered to have satisfied their duties of care and skill. The Business Judgment Rule provides a “safe harbour” for rational and informed managerial decisions, limiting the scope of personal liability for directors and officers. However, this presumption can be challenged if it can be shown that the director did not act on an informed basis, in good faith, or with a rational belief that the decision was in the company’s best interests.
Beyond their fiduciary duties, directors in South Africa have several key statutory duties. These include complying with all laws of the land, not just the Companies Act. Directors are also responsible for ensuring the company’s financial reporting complies with legal requirements and provides a true and fair view of the company’s financial position. Furthermore, they have a duty related to risk management, which involves identifying and managing risks that could affect the company’s business operations. These statutory duties are legally prescribed obligations that directors must adhere to.
Directors in South Africa can be held personally liable if the company sustains loss, damage, or incurs costs due to their actions or inactions in several circumstances outlined in Section 77 of the Companies Act. These include breaches of fiduciary duties (such as acting in bad faith or not in the company’s best interests), breaches of the duty to act with due authority, acting negligently, acting in an unauthorised manner, being party to conduct calculated to defraud creditors, or as a result of reckless or fraudulent conduct. This liability can extend to “any loss,” “any damage” (direct, indirect, or consequential), and “any costs” incurred by the company. However, the courts have cautioned against interpreting director liability as “wholesale liability,” emphasising that liability arises from clearly defined statutory breaches.
The concept of “proper purpose” relates to the reasons behind a director’s actions. A director must exercise their powers for the legitimate purposes of the company. This is not a subjective inquiry based on the director’s personal views or benefits. Instead, the test for proper purpose is objective. This means that a reasonable person in the director’s position would need to conclude that the purpose for which the power was exercised was indeed a proper one, aimed at promoting the interests of the company. A director cannot justify an action as being for a proper purpose if it is primarily to benefit themselves, their friends, or other parties at the expense of the company’s interests.
If a director disagrees with a board decision or believes it is not in the best interests of the company, they have several options. They can voice their concerns during the board meeting, ensuring their objections are recorded in the minutes. Directors also have the right to abstain from voting on a particular matter. This signifies that they are not supporting the decision without necessarily voting against it. In more serious cases where a director believes a decision is significantly detrimental or breaches their duties, they may consider resigning from the board to disassociate themselves from the decision. It is crucial for directors to act according to their conscience and their understanding of their fiduciary duties, prioritising the company’s best interests over personal or external pressures. Their liability extends to decisions made while they were a director, even if they later resign.
When facing potential conflicts of interest, directors must always prioritise the best interests of the company. Section 75 of the Companies Act requires directors to disclose any personal financial interest in a matter before the board. If a director has a material personal financial interest, they generally should not participate in the decision-making process related to that matter, unless the requirements of Section 75 are complied with. When shareholder interests seem to conflict with the broader best interests of the company (considering all aspects of its sustainability and long-term success), directors must use their “North Star” – the question of what is best for the company itself. They should not be unduly influenced by the specific desires of shareholders if those desires would harm the company in the long run. Managing expectations with those who appointed them (e.g., shareholders) from the outset, clarifying that their primary duty is to the company, is also advisable. In situations where a director feels they are being asked to act against the company’s best interests, they should stand firm in their fiduciary duties, even if it means abstaining, resigning, or challenging the decision.
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Carolynn Chalmers is the Chief Executive Officer of Professor Mervyn King’s Good Governance Academy and its initiative, The ESG Exchange. She has edited two international standards: ISO 37000:2021 – Governance of organizations – Guidance and its associated Governance Maturity Model, ISO 37004:2023.
Carolynn makes corporate dreams come true, assisting leaders and leadership teams in how to create value for their organisations. She makes use of her expertise and experience in corporate governance, organizational strategy, Digital Transformation, and IT to do so.
Carolynn is an Independent Committee Member of South Africa’s largest private Pension Fund, the Eskom Pension and Provident Fund, and recently retired as Independent Committee member of several board committees for the Government Employee Medical Scheme. Carolynn has extensive management, assurance and governance experience and has held various Executive roles for international, listed, private and public organisations across many industries.
Carolynn is best known for her successes in establishing governance frameworks, and designing and the leading large, complex initiatives that can result. She attributes this success to the application of good governance principles. She shares her insights on her 2 LinkedIn Groups – Applying King IV and Corporate Governance Institute.
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Dr Grebe is a chartered accountant and senior lecturer at the University of South Africa (Unisa).
She teaches postgraduate accounting sciences through blended learning using technology in distance education, and through face-to-face study schools throughout South Africa. During her employment at Unisa, she also acted as Coordinator: Master’s and Doctoral Degrees for the College of Accounting Sciences (CAS), chairperson of the research ethics committee and chairperson of the Gauteng North Region of the Southern African Accounting Association (SAAA).
Before joining Unisa as academic, she gained ten years’ experience in audit practice and in commerce.