The net broadens for ‘prescribed officers’ of a company
Following the introduction of the new Companies Act No.71 of 2008, (‘the Act’), employees may well want to establish with their HR departments whether or not their job-related functions fall within the ambit of a prescribed officer, as defined in the Act.
In the Act, Section 66 (10), refers to a “prescribed officer” as “a person who, within the company, performs any function that has been designated by the Minister in terms of Section 66 (10)”. In this section of the Act, it states that “the Minister may make Regulations designating any specific function or functions within a company to constitute a prescribed office for the purposes of this Act.”
To this end, the most likely persons who may be deemed prescribed officers of the company could be the following individuals:
• Chief Executive Officer and / or Managing Director;
• Executive and Non Executive Directors;
• C-suite Executive (e.g. CFO, COO, CIO, CPO, HR, etc.);
• Company Secretary;
• Senior Management;
• Internal Auditor; and
• Members of a Board Committee.
Based on their office and/or function, some individuals will be defined as prescribed officers of the company, regardless of the specific title given to the person by the company. The definition is wide, and encompasses additional employees of the company, other than its directors, who now have to comply with certain provisions of the Act, which were not applicable to them in the past.
The company must be able to determine who may be deemed as its prescribed officers. Each and every case needs to be assessed on its own merits. For example, and similar to the questions around the independence of directors, it is both a subjective and objective enquiry. Therefore a Chief Operating Officer in one company may well be a prescribed officer, but not necessarily in another company.
Due to the fact that there are certain fiduciary liabilities attached to prescribed officers, employees should inform themselves of these new developments and understand the implications thereof.
To assist prescribed officers to understand more about their fiduciary duties, CGF’s Fast Tracking Company Officers book provides a simplified account of these matters as covered in the Act, whilst also integrating King III related recommendations and relevant principles of Common Law.
ORDER: CGF FAST TRACKING COMPANY OFFICERS BOOK
Order your personal copy of the CGF Fast Tracking Company Officers Book & also receive a free Prescribed Officers guideline for R285.00 ex Vat.
CGF Research Institute (Pty) Ltd
Breaking News »