Personal liability of non-executive directors in South Africa: A global comparative analysis

• Author: Danha, M.D.
• DOI: https://doi.org/10.47348/JCCL/V8/i1a2
• Published date: 10 November 2022
• Date: 10 November 2022
• Citation: (2022) 8(1) JCCL&P 21
• Pages: 21-34

https://doi.org/10.47348/JCCL/V8/i1a2

21

PERSONAL LIABILITY OF NON-

EXECUTIVE DIRECTORS IN SOUTH

AFRICA: A GLOBAL COMPARATIVE

ANALYSIS

MUTSA D DANHA*

Tutor and LLM candidate

Learning Space Tuition and Wits Law School

ABSTRACT

The South African Companies Act 71 of 2008 (SA Companies Act)

contains extensive provisions detailing the circumstances under

which directors may be held personally liable for their actions

completed while carrying out their duties. These statutory provisions

are a partial codification and modernisation of the existing common-

law provisions that had previously regulated this area of company

law. These provisions still apply to the extent that they comply with

the Act’s statutory provisions. The common-law tradition in South

African company law has its roots in the English common law,

which has spawned many other legal traditions, from that applicable

in Australia to the tradition that has emerged (and diverged) in the

United States of America.

This article examines whether, in applying the statutory provisions

of the SA Companies Act, the manner in which personal liability

may be ascribed to directors would amount to a standard more

onerous than jurisdictions with similar legal traditions to South

Africa and, as such, render the position of director in South Africa as

(comparatively) undesirable.

A further examination of whether a director is an executive or

a non-executive director is relevant to establish whether liability

will ensue and to confirm the position in South African law on this

matter. Some of the distinctions between such directors are laid out

in the seminal case of Kaimowitz v Delahunt.

Overall, this article seeks to ascertain whether the trajectory of

South African company law is aligned with the modern forms of

the same law that have evolved in its ‘sibling jurisdictions’ (legally

speaking). It further seeks to establish whether any variance thereof

* BCom, LLB (Wits).

(2022) 8(1) JCCL&P 21

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