A global perspective on African corporate governance: the protection of stakeholders' interests

Esser, I.-M. (2007) A global perspective on African corporate governance: the protection of stakeholders' interests. South African Yearbook of International Law, 32, pp. 406-429.

Abstract

There are various definitions of corporate governance. Simply stated, it relates to the manner in which corporations are regulated and managed. One of the fundamental principles of corporate governance is stakeholder protection. There is often a tension between profit maximisation (for the shareholders) and the social responsibilities of companies which require the consideration of the interests of other stakeholders such as employees, creditors, consumers, suppliers, the environment, and the community at large. This article considers the duties of directors, and specifically to whom they owe these duties and their codification, by reference to the company law reform initiatives in South Africa and Botswana. Two important schools of thought relating to in whose interests the company should be managed are the enlightened-shareholder-value, and pluralist approaches. Under the enlightened-shareholder-value approach, the primary role of the directors is seen as promoting the success of the company for the benefit of the company as a whole, and the generation of maximum value for shareholders. The second school is that of pluralism, which sees shareholders as one constituency among many, and recognises the interests of various groups. The drafters of the South African Company Law Reform Policy Document of May 2004 referred to these approaches when discussing the protection of stakeholders. Their viewpoints, together with the relevant clauses in the Companies Bill of 2007, are discussed below.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Esser, Professor Irene-Marie
• Authors: Esser, I.-M.
• College/School: College of Social Sciences > School of Law
• Journal Name: South African Yearbook of International Law
• ISSN: 0379-8895
• ISSN (Online): University of South Africa