Includes bibliographical references / Corporate law developments concerning the empowerment of non-shareholder constituencies in Anglo-American jurisdictions of the United States of America and the United Kingdom since the 1980s have been of very limited utility. Available literature and legal authorities in both those jurisdictions clearly illustrate the obsession of policy makers and the judiciary with normative statements of directorial responsibilities to non-shareholder constituencies without introducing the necessary and complimentary right of action for those constituencies. The reluctance to introduce such right of action appears to be motivated by the exaggerated fear of the potential for 'floodgates' of litigation. This reluctance to extend corporate law remedies to non-shareholder constituencies, particularly in public companies, clearly overlooks the importance of the supervision of the use of corporate power to minimize or eradicate directorial self-serving misconduct, rather than the exclusive protection of shareholders, as the primary purpose of corporate law remedies. The introduction of an extended corporate legal enforcement framework under the South African Companies Act of 2008 may be indicative of the feasibility of the right of action for non-shareholder constituencies. Since the applicable enforcement regime in corporate law is a function of the applicable normative theory, a broadly inclusive corporate legal enforcement framework cannot be based on the conventional shareholder-oriented theories of 'Shareholder Primacy Norm and 'the Enlightened Shareholder Value Approach.' It is, therefore, argued that the South African Companies Act, 2008, introduces the Actionable Enlightened Shareholder Value Approach which invariably necessitates, among other things, the extended meaning of 'the best interests of the company' as provided for under s 76(3)(b) of the Act. The Actionable Enlightened Shareholder Value Approach recognises that the primary purpose of corporate law remedies is not the exclusive protection of shareholders, but the supervision of the use of corporate power to minimize or prohibit directorial self-serving misconduct, which purpose benefits a broad range of corporate constituencies. That is why the legal enforcement framework under the South African Companies Act facilitates the empowerment of corporate constituencies beyond just shareholders; ensures the availability of broad range of remedies; gives the opportunity for corporate constituencies to apply for remedies in the public interest, with leave of the court; recognises that the protection of the company's legal interests can be undertaken by a broad range of corporate constituencies and, also generally, with leave of the court; and facilitates the ability to hold any person liable for loss or damage suffered as a result of the contravention of any provision of the Act by that person.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:uct/oai:localhost:11427/16606 |
| Date | January 2015 |
| Creators | Mongalo, Tshepo Herbert |
| Contributors | Davis, Dennis, Corder, Hugh |
| Publisher | University of Cape Town, Faculty of Law, Department of Commercial Law |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Doctoral Thesis, Doctoral, PhD |
| Format | application/pdf |
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