Supporting Inclusive Growth and Sustainable Development in Africa - Volume II

Transforming Infrastructure Development

Elena G. Popkova, Bruno S. Sergi, Lubinda Haabazoka, Julia V. Ragulina, Elena G. Popkova, Bruno S. Sergi, Lubinda Haabazoka, Julia V. Ragulina

• Publisher: Palgrave Macmillan
• Year: 2020
• Print ISBN:
  9783030419820
• eBook ISBN:
  9783030419837
• Topic: Business
• Subtopic: International Business
• Index: Business

This edited volume explores and dissects Africa's economic growth and sustainable development using an optimal conceptual model of the progressive continent's development up to and until 2030. Africa is studied not against the background of developed (OECD) and leading developing (e.g. BRICS) countries, but as a separate economy and as a self-sufficient region which follows its own priorities, and implements its own unique opportunities and vectors of growth and development. This volume addresses the contemporary and topical issues of inclusive growth, digital modernisation, and sustainable development, recommending policy outcomes for the future.

Part ITransforming Infrastructure Development

© The Author(s) 2020

E. G. Popkova et al. (eds.)Supporting Inclusive Growth and Sustainable Development in Africa - Volume IIhttps://doi.org/10.1007/978-3-030-41983-7_1

Begin Abstract

1. Corporate Governance in South Africa: A Comparative Aspect

Alla S. Laletina¹ and Igor A. Kosyakin²

(1)

Russian Academy of Sciences, Institute of State and Law, Moscow, Russia

(2)

JSC “Concern ‘Sozvezdie’”, Voronezh, Russia

Alla S. Laletina (Corresponding author)

Email: [email protected]

End Abstract

1 Introduction

The Republic of South Africa (South Africa) is of particular interest for research through the prism of the Russian experience. The country is a member of BRICS (Brazil, Russia, India, China and South Africa)—the organization of the largest developing countries, leaders in their regions. South Africa, like Russia, in the early 1990s underwent a transit of the political system and during the 1990s significantly transformed its economic model towards greater inclusivity. The creative evolution of the Anglo-Saxon legal system and corporate governance model among BRICS members can be very well traced on the example of South Africa.

2 Materials

The theoretical framework to solve the above problems has been provided by works of foreign (J.J. du Plessis, R. Croucher, L. Miles, V. Padayachee, C.W.J.C. Swart, etc.) and Russian (A.G. Dementyeva, A.V. Gabov, V.K. Verbicky, etc.) scholars who have studied the theory of corporate governance in South Africa and Russia, its organizational foundations, corporate governance best practices and their significance in the legal system from the standpoint of both economic and legal sciences.

The empirical framework has been provided by the legal acts of South Africa, the Russian Federation, and some other countries, as well as sources of best practices of corporate governance (in particular—King’s Kommitee’s reports, Russian Corporate Governance Code, and listing rules of Johannesburg Stock Exchange).

3 Methodology

The research is based on the universal dialectical-materialistic method, general scientific methods (analysis, synthesis, induction, deduction, modeling) and particular scientific methods (comparative-legal, historical-legal, legal forecasting), the combined use of which allows a comprehensive study of the most important aspects of corporate governance in South Africa.

4 Results

4.1 Legal Regulation

The basic act regulating the activities of South African corporations is Companies Act 2008, which came into force on 1 May 2011 (such a long period of implementation, in the authors’ opinion, has to do with the fate of close corporations, which numbered more than 2 million; since the entry into force of Companies Act 2008, they are not registered). In this, regulation is similar to the British one: all types of companies are considered under one law. In addition, the literature notes that the concept of the law was significantly influenced by the New Zealand Companies Act 1993 (du Plessis 2009, 274–275).

However, according to the authors, Companies Act 2008 has an original character: its institutions are generated by the specific historical and economic situation in South Africa.

The act itself contains cases of by-law regulation, which is the responsibility of the member of the Cabinet of South Africa (Minister of Finance), in charge of company oversight. Regulations can be adopted on a variety of topics: from the issue of shares to the internal structure of a Corporation.

In comparison, in the Russian Federation, regulation of financial markets is the responsibility of the Bank of Russia (in particular, it approved additional requirements for the preparation, convening and holding of general meetings of shareholders and standards for the issue of securities). However, a number of acts were adopted by the Government of the Russian Federation, a body of general competence.

The reform of corporate law has been discussed for a long time: in 1993, the Corporate Governance Committee was formed, headed by a retired judge of the Supreme Court of South Africa, Mervyn E. King. Gradually, at the state level, the need to design a new system of corporate governance began to be realized (South African Company Law for the Twenty-first Century). The King Committee issued four reports: before the adoption of Companies Act 2008 in 1994 and 2002, and after in 2010 and 2016 (similar national corporate governance reports have begun to appear in different countries: the best known is the report of the British Committee on the financial aspects of corporate governance (Cadbury Committee) in 1992). In fact, the King Committee’s reports are collectively the national code of corporate governance.

The introduction of best corporate governance practices is a mandatory requirement for issuers on the Johannesburg Stock Exchange. Generally, these rules relate to the internal structure of the Corporation (the presence of a corporate secretary, committees of the board, financial director) and the adoption of a number of acts (remuneration policy, report on the implementation of corporate governance practices). The listing rules also reflect the national specificities of South Africa: the need to maintain gender and racial diversity on the board of directors is emphasized.

One of the main markers of the evolution of the corporate governance architecture in South Africa, which should be mentioned now, is a departure from the principle of “acting in the interests of the company as a whole and maximizing profits”—still common in Russian legislation and dominating in Russian judicial practice—to the principle of taking into account the interest of all stakeholders—including at the level of legislation (Croucher, Miles 2010, 369–370).

Thus, there is a typical Anglo-Saxon regulatory system: a single law and complementary best practices of corporate governance (reports of the King Committee and listing rules). In Russia, on the other hand, the basics of the legal status of joint-stock companies alone are regulated by two (the Civil Code of the Russian Federation and the law on a specific type of legal entity), and of state corporations and some other non-profit organizations—by three legislative acts (the Civil Code of the Russian Federation, the law on non-profit organizations and the law on a specific type of legal entity). The separate law is devoted to insolvency. Russian corporate governance practices are more formalized (the Bank of Russia adopted the Corporate Governance Code of 2014, approved by the Government of the Russian Federation). However, only public companies, w...

Table of contents

• Cover
• Front Matter
• Part I. Transforming Infrastructure Development
• Part II. Inclusive Economic Growth
• Part III. Economic Diversification and Integration
• Back Matter