Media headlines regularly depict the collapse of governance within large organisations, with articles citing poor management controls and corporate greed as reasons.

As regulations and legislation relating to governance within South Africa intensify, so too the controls within companies are beginning to tighten. With the ever-increasing focus on ‘reforming’ unacceptable business practices, it should come as no surprise that casualties are occurring more often, with directors of companies being increasingly held personally accountable for business malpractices or oversights. Recent acts such as the Competitions Act (and its amended Bill which is expected to be signed by President Zuma soon) will see directors being fined up to R 500 000 in their personal capacity, and or face jail sentences up to 10 years where they have contravened certain provisions of the Act.

Notwithstanding the alarming number of business failures, these figures and business impacts could still be considered small in comparison to what could result when companies face the impact of new legislation expected to be implemented next year. While larger companies are generally equipped to deal with the continued surge of new law and regulations, many smaller companies have not yet begun to consider the manner in which the new Companies Act 2008 and King III for example, will impact their businesses.

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