Are shareholders exclusive beneficiaries of fiduciary obligations in South Africa? The role of fiduciary obligations in the 21st Century

Authors Brian Peter Lee Jennings

ISSN: 2521-2575
Affiliations: Director at ENSafrica
Source: Journal of Corporate and Commercial Law & Practice, The, Volume 1 Issue 2, 2015, p. 54 – 81


This paper investigates and evaluates the existing South African common law position of to whom directors owe their duties, in light of the transformative requirements of the Constitution. Unsurprisingly, the South African legal position largely mirrors the position found within Anglo-American jurisdictions, on which our company law is based. But whether this is justified, or warranted, in a post-constitutional South Africa, which values equality, dignity and freedom as being paramount, is the subject of this paper. This paper will attempt to address the question whether South Africa’s Constitution, and the recently promulgated 2008 Companies Act, appropriately balances the competing ideological tensions found within South African society. In undertaking this balancing act, one will consider whether the Companies Act gives effect to the most appropriate ideology in the most appropriate circumstances, to give effect to the constitutional values of dignity, equality and freedom. The hypothesis at the forefront of this paper is that the legal interpretation of the beneficiary of the duties owed by directors in South Africa must be revisited in a post-constitutional environment, in the very least. That revisiting must be dependent on the company to whom the rule is being applied, and its position in society. This will, in turn, determine the most appropriate theory (from a legal, socio-economic and philosophical point of view) to apply to determine to whom such company’s directors owe their duties.