Revised drafts of the Companies Amendment Bill 2023 have now been sent to the National Counsel of Provinces as reported by Bowmans Law and by Webber Wentzel in early December 2023.
The Companies Amendment Bill is a revision of the draft 2021 Bill. It was published for public comment in October 2021.
A copy of the Bill can be downloaded here.
Notable revisions
Notably for public and state-owned companies, the Draft Bills propose
(i) changing the previous ‘one strike rule’ to a ‘two strike rule’ as it pertains to the requirement for non-executive directors on remuneration committees to step down in the case of a failed vote on a remuneration report; and
(ii) aligning social and ethics committee membership requirements more closely with King IV requirements, by only requiring a majority of the committee members to be non-executive directors.
The Draft Bills also correct the error in drafting such that for all other companies, at least one of the three social and ethics committee members will need to be a non-executive director.
Clarification has also been provided for any issue of unpaid shares to a ‘stakeholder’, that the ‘stakeholder’ must be independent, and that the stakeholder agreement must be in writing.
Pertaining to director delinquency and probation claims and director liability, it has been made clear that a court may extend the period for bringing these claims regardless of whether or not the initial period to bring a claim has expired or if the circumstances occurred prior to the promulgation of this amendment.
Unfortunately, there are no changes to the proposed public disclosure requirements for private company annual financial statements (and resultantly director and public officer remuneration disclosers for private companies that are required to be audited), a topic that was hotly debated during the public consultations.
Preparing for the amended Companies Act
Companies should prepare for the structuring of binding remuneration policies, alignment of remuneration reporting and pay gap disclosures and new social and ethics committee requirements.
