Duties of the Company Chairman

• Jurisdiction: South Africa
• Date: 16 August 2019
• Author: Michele Havenga
• Citation: (2005) 17 SA Merc LJ 137
• Published date: 16 August 2019
• Pages: 137-149

Duties of the Company Chairman

MICHELE HAVENGA

University of South Africa

1 Introduction

The position of the company chairman has, in recent years, acquired

considerable signif‌i cance. This note considers the duties of the chairman and

whether higher standards may in future be imposed on this off‌i cer than on other

directors when his or her duties to the company come under scrutiny. The focus

is on the position in South Africa, and references to the Companies Act are

to the South African Companies Act 61 of 1973, unless otherwise indicated.

Developments in Australian and English law are also considered since these

three systems share the same basis and similar principles govern the position

of the chairman of the board.

I have used the term ‘chairman’ as an indication of the off‌i ce of the individual

who heads a company’s board of directors, rather than ‘chairperson’ which has,

in an attempt to be gender neutral, become fairly common.1

2 Legislation

Company statutes generally do not provide much guidance on the

responsibilities of the company chairman. His or her position is not def‌i ned

in the Acts, although it is recognised in certain provisions. The South African

Companies Act authorises any meeting of a company to elect any member to

be chairman2 and confers certain rights and duties in respect of meetings on

him or her.3 The minutes of any meeting of members or directors purporting

to be signed by the chairman of that meeting, or by the chairman of the next

succeeding meeting, are evidence of the proceedings at that meeting.4 However,

the Act provides no def‌i nition of ‘chairman’. The Australian Corporations Act

2001 contains similar provisions,5 and s 370(5) of the English Companies Act

1985 allows the members to elect a chairman if a company’s articles do not

provide guidance in this regard.

1 See also Sir Adrian Cadbury The Company Chairman 2 ed (1990) at 2 who suggests that, although

‘chairperson’ is recognised in dictionaries, it remains rather contrived and awkward, particularly when

used it in the plural to describe, eg, deputy chairmen.

2 Section 191.

3 See, eg, s 192(1) which compels the chairman to adjourn a meeting in certain circumstances;

s 195(a) which gives the chair a casting vote; and s 199(4) which confers certain powers in respect of

special resolutions.

4 Sections 204(3) and 204(4). But see also Poolquip Industries (Pty) Ltd v Griff‌i n & Another 1978

(4) SA 353 (W) where the Court indicated that this does not provide the exclusive method of proving a

company’s resolution.

5 See ss 248E, 248G, and 249U.

137

(2005) 17 SA Merc LJ 137

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