SOUTH AFRICA Law and Practice Contributed by: Professor Michael Katz, Matthew Morrison, Madison Liebmann and Sinovuyo Damane, ENS
4.4 Shareholder Claims and 3.4 Appointment and Removal of Directors/Officers for further discussion). Disclosure of Payments to Directors/Officers A company required to have its annual financial state - ments audited (including public companies, state- owned companies and private companies exceeding the applicable public interest score threshold) must disclose, on an individualised and named basis, the remuneration and benefits received by each director and prescribed officer. This includes salaries, bonus - es, benefits, pension contributions, share-based remuneration and other emoluments, in accordance with the amended Section 30 of the Companies Act. Companies Amendment Act The Companies Amendment has introduced an amendment related to the access of information, this amendment was not yet in force as at April 2026. In this regard, Section 26 (1) sets out a list of company records a beneficial interest holder (which includes a shareholder) is entitled to inspect and copy, which has been expanded to include a company’s register of the disclosure of beneficial interest. A beneficial inter - est holder will therefore have the right to inspect and copy information from a company’s MOI, the records in respect of a company’s directors, reports to annual meetings, notices and minutes of annual meetings, securities register, register of the disclosure of ben - eficial interests and a company’s AFS. Sections 30A and 30B of the Companies Act, which came into effect on 22 May 2026, require public and state-owned companies to prepare a remuneration policy for shareholder approval by ordinary resolu - tion and to present remuneration reports each year to shareholders at annual general meetings. Companies required to have their AFS audited must now include the remuneration and benefits received by each individually named director and prescribed offic - er. Public and state-owned companies must prepare and present a remuneration policy (requiring ordinary shareholder resolution approval, valid for three years) and a remuneration report. The remuneration report must include a background statement, the remunera - tion policy and an implementation report detailing total remuneration for each director and prescribed offic -
er, the highest and lowest paid employees, average and median remuneration, and the remuneration gap ratio. If the remuneration report is not approved at the AGM, the remuneration committee must present an explanation at the next AGM addressing shareholder concerns, and non-executive Remco (remuneration committee) members must stand for re-election. If not approved again the following year, those non-exec - utive directors may continue as directors but will be ineligible to serve on the Remco for two years. The relationship is statutory and contractual, regulated by the Companies Act and the company’s MOI, which sets out rights attaching to shares. A shareholders’ agreement may also regulate the relationship but must be consistent with the MOI; any inconsistent provision is void to that extent. The principle of separate legal personality means shareholders are not liable for the company’s acts or omissions and owe no legal duties to the company. Only in exceptional circumstances can a court impose personal liability on shareholders or invoke the Companies Act’s statutory mechanism to pierce the corporate veil in cases of “unconsciona - ble abuse” of separate legal personality. Shareholders are entitled to a share of distributed profits in propor - tion to their holdings and, on winding-up, to surplus assets after creditors have been fully paid. Preference shareholders are typically entitled to receive their por - tions before ordinary shareholders. 4.2 Role of Shareholders 4. Shareholders 4.1 Companies and Shareholders As mentioned in 3.4 Appointment and Removal of Directors/Officers , shareholders are responsible for appointing a certain percentage of directors. The management of a company is primarily conducted by the directors but, in addition to matters requiring shareholder approval under the Companies Act (see 2.3 Decision-Making Processes ), a company’s MOI may set out reserved matters requiring shareholder approval. The Companies Act enables shareholders to invoke a statutory derivative action to hold directors accountable (see 4.4 Shareholder Claims ).
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