Shareholder activism: the birth of a new phenomenon in South African corporate law

[摘要] English: Shareholder activism is a means by which shareholders voice their concerns or dissatisfaction in companies in which they invest. This phenomenon started centuries ago, but picked up momentum and developed in the United States of America ('USA) in the 1930's, after the fall of Wall Street in 1929. Soon thereafter, it spread to countries such as the United Kingdom and to the rest of the world. In the USA in 1934 the government passed the Securities and Equities Act, which also contains proxy rule Rule 14A-8. This rule is used as a tool to encourage shareholders to make proposals on matters to be voted on at annual general meetings. It introduced internal corporate governance approaches such as the 'negotiated agreements, the 'nexus of contract and the 'one axis approach. In South Africa, section 185 of the Companies Act 61 of 1973 makes provision for shareholders to draw proposals to be presented at annual general meetings. Section 65 of the Companies Act 2008 will also afford shareholders to make proposals. A company is made up of shareholders. Shareholders are people or entities that have an economic interest in a company. Examples of shareholders include private individuals, directors, employees, customers, community, government, trade partners, media, creditors etc. Shareholders can be classified as individuals or institutional. Institutional activists include public pension funds and private equity funds. They can be business associations, social activists and labour unions. They can have a direct or indirect beneficial interest in a company. Shareholders can also be classified as preference, controlling, majority and minority shareholders. Companies can be incorporated as private or public. A company can be held liable for the actions of its directors. Shareholders have rights and duties in a company. These include the right to vote, monitor and elect directors etc. A company is juristic person with its own status. In terms of the rule in Foss v Harbottle a company can take legal steps against itself and if it fails any person can take legal steps on its behalf. A person who deals with a company is protected under the Turquand Rule. This rule allows persons who are dealing with a company to assume that all internal company matters have been complied with and that the agent of a company is not acting ultra vires. Companies are managed by directors who are appointed by shareholders. Directors should be natural persons who are not minors, or have committed serious offences or are unrehabilitated insolvents. Directors have duties such as to act intra vires, to exercise care, diligence and skill; to keep confidential information; to manage risks and to act as a board. Directors can be held jointly and severally for their actions. Directors can be executive, non-executive or independent non-executive directors. Directorship is terminated when a director has committed serious offences and are unrehabilitated insolvents or by agreement with a company. Reasons for shareholder activism include corporate governance. There are different systems of corporate governance such as 'insider dominated, 'outsider dominated, 'comply or else and 'comply or explain. Sometimes shareholder activism has an influence over the way companies are managed. Due to shareholder activism, a company can change its management style, transform and change policies. The media, such as press, internet, radio and television play an important role in shareholder activism and therefore shareholder activists avoid the lengthy judicial process and opt for media to raise their discontent.

[发布机构] University of the Free State