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Companies Act, 2008 (Act No. 71 of 2008)

Chapter 2 : Formation, Administration and Dissolution of Companies

Part F : Governance of companies

72. Board committees

 

(1) Except to the extent that the Memorandum of Incorporation of a company provides otherwise, the board of a company may—
(a) appoint any number of committees of directors; and
(b) delegate to any committee any of the authority of the board.

 

(2) Except to the extent that the Memorandum of Incorporation of a company, or a resolution establishing a committee, provides otherwise, the committee—
(a) may include persons who are not directors of the company, but—
(i) any such person must not be ineligible or disqualified to be a director in terms of section 69; and
(ii) no such person has a vote on a matter to be decided by the committee;
(b) may consult with or receive advice from any person; and
(c) has the full authority of the board in respect of a matter referred to it.

 

(3) The creation of a committee, delegation of any power to a committee, or action taken by a committee, does not alone satisfy or constitute compliance by a director with the required duty of a director to the company, as set out in section 76.

 

(4) `The Minister by, regulation, may prescribe-
(a) a category of companies that must each have a social and ethics committee, if it is desirable in the public interest, having regard to—
(i) annual turnover;
(ii) workforce size; or
(iii) the nature and extent of the activities of such companies
(b) the functions to be performed by social and ethics committees required by this subsection; and
(c) rules governing the composition and conduct of social and ethics committees.

 

(5) A company that falls within a category of companies that are required in terms of this section and the regulations to appoint a social and ethics committee may apply to the Tribunal in the prescribed manner and form for an exemption from that requirement, and the Tribunal may grant such an exemption if it is satisfied that-
(a) the company is required in terms of other legislation to have, and does have, some form of formal mechanism within its structures that substantially performs the function that would otherwise be performed by the social and ethics committee in terms of this section and the regulations; or
(b) it is not reasonably necessary in the public interest to require the company to have a social and ethics committee, having regard to the nature and extent of the activities of the company.

 

(6) An exemption granted in terms of subsection (5) is valid for five years, or such shorter period as the Tribunal may determine at the time of granting the exemption, unless set aside by the Tribunal in terms of subsection (7).

 

(7) The Commission, on its own initiative or on request by a shareholder, or a person who was granted standing by the Tribunal at the hearing of the exemption application, may apply to the Tribunal to set aside an exemption only on the grounds that the basis on which the exemption was granted no longer applies.

 

(8) A social and ethics committee of a company is entitled to-
(a) require from any director or prescribed officer of the company any information or explanation necessary for the performance of the committee's functions;
(b) request from any employee of the company any information or explanation necessary for the performance of the committee's functions;
(c) attend any general shareholders meeting;
(d) receive all notices of and other communications relating to any general shareholders meeting; and
(e) be heard at any general shareholders meeting contemplated in this paragraph on any part of the business of the meeting that concerns the committee's functions.

 

(9) A company must pay all the expenses reasonably incurred by its social and ethics committee, including, if the social and ethics committee considers it appropriate, the costs or the fees of any consultant or specialist engaged by the social and ethics committee in the performance of its functions.

 

(10) Section 84(6) and (7), read with the changes required by the context, apply with respect to a company that fails to appoint a social and ethics committee, as required by this section and the regulations.