A COMPARATIVE ANALYSIS OF COMPANY DIRECTORS’ ACCOUNTABILITY AND THE STATUTORY DUTY OF CARE, SKILL AND DILIGENCE IN SOUTH AFRICA AND ZIMBABWE

Abstract

This article provides a comparative analysis of company directors’ accountability and the application of the duty of care, skill and diligence under the South African and Zimbabwean company law. Notably, Zimbabwe has recently partially codified company directors’ duty of care, skill and diligence for the first time in the Companies and Other Business Entities Act [Chapter 24:31] 4 of 2019 (COBE Act), which came into effect on 13 February 2020. On the other hand, the Companies Act 71 of 2008 (Companies Act 2008) of South Africa also partially codified company directors’ duty of care, skill and diligence and it came into effect on 1 May 2011. Consequently, South Africa has developed some good academic literature and jurisprudence on the duties of company directors for almost a decade. This is one of the reasons why South Africa’s Companies Act 2008 was chosen for a comparative analysis with Zimbabwe’s COBE Act on directors’ duties. Accordingly, the article discusses the gaps and flaws in the relevant company laws in South Africa and Zimbabwe in relation to the interpretation and application of the directors’ duty of care, skill and diligence. This is done to recommend some measures that could be adopted by the relevant regulatory bodies and companies to enhance their directors’ accountability in both jurisdictions.

Keywords

• company directors
• duty of care
• skill and diligence
• business judgment rule
• director accountability