The Conflict Between Director Reliance in the Companies Act and Director Liability in the JSE Listings Requirements

• Jurisdiction: South Africa
• DOI: 10.10520/ejc-btclq_v16_n3_a3
• Author: Siyabonga Nyezi
• Pages: 15-22
• Date: 01 November 2025
• Published date: 01 November 2025
• Published By: Siber Ink

15

© Juta and Company (Pty) Ltd

The Conf‌l ict Between Director

Reliance in the Companies Act and

Director Liability in the JSE Listings

Requirements

SIYABONGA NYEZI*

ABSTRACT

In the f‌i lm The Pursuit of Happyness, the protagonist, Chris Gardner, juggles

the challenges of fatherhood on the one hand, with his failing attempts at an

entrepreneurial breakthrough on the other. Throughout the f‌i lm, each keeps

getting in the way of the other, almost as if they cannot coexist. A missive

on a f‌i lm about a struggling entrepreneur and father is perhaps not the most

conventional way to start an article on delegation and reliance in company

law; but the purpose of the anecdote is to emphasise the concept of two

attempts at doing the right thing getting in the way of each other – a central

theme in this article’s analysis of the Financial Service Tribunal ruling in Munro

v Johannesburg Stock Exchange (JSE2/2023) [2024] ZAFST 36. More specif‌i -

cally, this article examines the incongruence between the reliance provisions

in section76(5) of the Companies Act 71 of 2008, and the provisions relating

to director liability in the JSE Listings Requirements (‘Listings Requirements’).

In Munro, the Financial Services Tribunal (‘Tribunal’) had to determine,

inter alia, whether a (f‌i nancial) director was liable to be sanctioned for a

contravention of the Listings Requirements, resulting from misstatements in

the company’s f‌i nancial statements, where the director relied on informa-

tion provided to him by other employees of the company. This article asserts

that the provisions of the Companies Act and the Listings Requirements result

in parallel and conf‌l icting treatment of reliant director conduct. The article

further argues that there are instances where the JSE Listings Requirements

may unduly impose liability on directors who have, in line with section 76(5),

relied on information provided to them by other employees.

Introduction

Section 76 of the Companies Act outlines the standards of conduct in

accordance with which directors must execute their duties. Among these

is the duty of a director to execute their duties with the necessary skill,

care and diligence. Section 76(5) affords directors some leeway in the

performance of their duties, in that it allows directors to delegate their

duties and rely on information provided to them by others – for example,

suitably qualif‌i ed employees, legal advisors and accountants retained by

the company – in the execution of their duties as directors. A director

* BCom (UCT), LLB (Unisa), Attorney of the High Court of South Africa.

2025 16(3) BTCLQ 15

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