Conclusion of the fiduciary duties

The recent appearances at the Zondo commission regarding the decision taken in the boardroom is a good demonstration of the seriousness that comes with being a director.

In one instance a former director of an important state entity could not clearly recall approving a deal worth R1 billion. The role of a director requires duty to care because the systematic impact of failure can affect generations and economies. The challenge with directorships is that you might be called to account about decisions taken during your term of office and thus the importance of understanding and executing your fiduciary responsibilities and applying your skills (duty to care). Directors must also avoid abusing power or even using the privileged information they have to their benefits or the benefits of friends. The fining of the former Steinhoff CEO by the Financial Sector Conduct Authority is a demonstration of risks related to not applying proper governance as a director.

Poor corporate governance by directors who do not execute their responsibilities and who do not apply the principle of duty to care is bad for the economy, bad for growth, bad for job securities and bad for South Africa.

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By murweb