Company Directors Take Note: Complying with Your Duties is a Big Deal
“A director must… act in good faith and for a proper purpose; in the best interests of the company; and with the degree of care, skill and diligence that may reasonably be expected…” (Companies Act of 2008)
The first Guideline for 2025 issued by the CIPC (Companies and Intellectual Property Commission) aimed to “sensitise directors on the consequences for non-compliance with their duties to a company.”
Here’s a quick overview of these duties and what could happen if directors don’t comply.
What are the duties of directors?
A director must exercise the powers and perform the functions of a director:
- In good faith and for proper purpose
- In the best interest of the company
- Without using the position to knowingly cause harm to the company
- With the degree of care, skill and diligence that may reasonably be expected of him/her
This means that directors should carefully understand the provisions of the Companies Act that relate to the governance of companies, including, but not limited to:
- Section 75: Directors’ personal financial interests
- Section 76: Standards of directors’ conduct
- Section 77: Liability of directors and prescribed officers
- Section 78: Indemnification and directors’ insurance
- Section 213: Breach of confidence
- Section 214: False statements, reckless conduct and non-compliance
- Section 215: Hindering administration of the Act
Recent amendments
In the last few months, amendments to the Companies Act have introduced significant new changes that have further increased the responsibility and risk that directors shoulder.
Focusing on accountability, transparency, and alignment with international governance standards, the changes include stricter fiduciary duties to prioritise company and stakeholder interests, mandatory transparency in director appointments, and new director criteria disqualifying individuals with a record of insolvency, criminal convictions, or prior misconduct from serving as directors.
Consequences of non-compliance: Civil liability
The Companies Act emphasises that a director of a company in his/her personal capacity may incur civil liability for loss or damage incurred by the company due to the director:
- Acting on behalf of the company without the necessary authority
- Trading recklessly or under insolvent circumstances
- Being a party to an act or omission by a company calculated to defraud
- Being a party to false and misleading financial statements
- Being a party to a prospectus or written statement that contains an untrue statement
- Failing to vote against an unauthorised or inconsistent provision of the Companies Act during a meeting or decision-making process
In a recent High Court case, the court found that directors of a property fund had grossly abused their positions and engaged in reckless conduct that severely harmed the company. The judge declared these directors delinquent and ordered them to compensate the fund for losses incurred due to their actions, including the costs of forensic investigation and reputational harm.
A delinquency declaration can also result in a ban from holding directorships for a specified period or even permanently, as it did for SAA’s Chairperson Duduzile Myeni.
Consequences of non-compliance: Criminal liability
A director may be also held criminally liable in his/her personal capacity in terms of various sections of the Act for:
- Disclosing confidential information concerning the affairs of any person obtained in carrying out any function in terms of the Companies Act
- Falsification of the company’s accounting records
- Trading recklessly or under insolvent circumstances
- Providing false and misleading information
- Being party to an act or omission by a company that is calculated to defraud
- Being party to a prospectus or written statement that contains an untrue statement
- Failing to satisfy a compliance notice
Some of these contraventions may result in a fine or imprisonment for a period not exceeding 10 years (or to both a fine and imprisonment) while others carry lesser (but still nasty) penalties.
Don’t be fooled: Insurance won’t always save you
A “Directors and Officers Liability” policy protects directors against claims arising from decisions made in their official capacity. However, breaches of fiduciary duty, dishonesty, fraud, criminal acts and wilful misconduct are common policy exclusions.
In addition, Section 78 of the Companies Act clearly sets out the requirements of indemnification and directors’ insurance. Even so, the CIPC says that directors of companies often fail to fully appreciate the requirements of this section: there are loads of requirements to qualify for indemnification.
6 Ways to Maximise Your Revenue Through Smarter Networking
“Networking is not about just connecting people. It’s about connecting people with people, people with ideas, and people with opportunities.” (Michele Jennae, business coach and author)
Most entrepreneurs know they should be building a network, but not many know this should be a core business strategy. Building and maintaining the right relationships can lead to improved contracts, revenue gains and business growth, provided you know how to use them.
The good news is, we aren’t asking you to go out and become a natural networker. You just need to put a few key habits in place and start treating networking as a long-term business investment. Here are six common misconceptions that, when remedied, can help turn handshakes into business growth.
1. “I go to networking events, but I never see any benefits”
This is a common complaint, but it’s seldom the event that’s at fault. Many people see no benefits because they approach networking events passively. They show up, have a few chats, hand out business cards, and hope someone follows up. That’s not networking. That’s exposure.
To make events pay off, you need to arrive with a goal, and steer conversations intentionally. Then afterwards, you need to follow up promptly. This doesn’t mean that you need to sell to everyone in the room. Often it’s far better to listen to people’s needs and identify just where you might be useful. A short, personalised follow-up message, the next day could then unlock a real business opportunity.
2. “I simply don’t have time to network”
Networking doesn’t have to be a drain on your time. If you’re chatting to the right people, just one or two strategic conversations a week might be all you need. The key is to start thinking of networking as business development – everyone has time for that.
If you can carve out 30 minutes a week to check in with past contacts, make introductions for others, or send a useful article to someone in your network, you’re already doing more than most. The results won’t be instant, but it all adds up.
3. “My industry doesn’t work like that”
Whether you’re in logistics, consulting, construction, or retail, your next deal could still come from a friendly introduction. The channel might differ, but the principle is the same. People do business with people they trust. That old saying, “it’s not what you know, but who you know” has never been truer. No industry is too technical or regulated for word-of-mouth not to matter.
4. “I’ve already got a good network”
Knowing people isn’t enough. That network of people needs to be activated. This means that you need to make yourself visible, helpful, and memorable. Stay top-of-mind by making introductions, sharing your insights, or simply checking in without hoping to make a sale. The goal isn’t to extract value, it’s to keep yourself fresh in their minds so you’re the first person they think of when they do need something.
And remember: relationships decay over time, so make sure you refresh them regularly.
5. “Networking doesn’t feel authentic”
Networking should never feel like a performance. The most effective networkers aren’t slick or rehearsed. They listen more than they talk. They ask thoughtful questions. If you’re having no luck networking, it may be because you’re trying too hard to be interesting, rather than simply being interested.
Shift the focus. Stop trying to pitch, and start looking for ways to be useful. Can you make an introduction? Offer advice? Share a resource? That’s where trust starts and a true network can develop.
6. “I don’t see how this makes me money”
Networking contributes directly to revenue by opening access to people and opportunities you wouldn’t reach on your own. The referrals you get from people you have met and been valuable to, will often lead to new business.
The bottom line
There’s no need to “become a networking expert,” but there is a need to focus on a few strategic relationships. Show up with intent. Follow up with purpose. And above all, give before you ask. The returns might not be instant, but they will come.
Your Tax Deadlines for July 2025
- 07 July – Monthly PAYE submissions and payments
- 25 July – Value Added Tax (VAT) manual submissions and payments
- 30 July – Excise duty payments
- 31 July – VAT electronic submissions and payments, Corporate Income Tax (CIT) Provisional Tax payments where applicable.
