Year: 2025
Type: article
Abstract: The approval of corporate law transactions under the South African Companies Act 71 of 2008, as amended, is anchored in directors' standards of conduct (that is, the fiduciary duties and the duty of care, skill and diligence) as the primary requirement. It is argued that the standards of conduct of directors as a requirement for the approval of selected fundamental transactions (which require uncompromising objectivity and independence) are inadequate. Professional skepticism – a concept embedded in the work of professional auditors – is proposed as an additional standard for approval of those selected fundamental corporate law transactions. Because professional skepticism goes beyond mere objective considerations of fiduciary duties and the duty of care, skill and diligence; and requires the observance of critical factors such as having a questioning mind and making a critical assessment of transactional evidence, it is best suited for the selected fundamental transactions explained in this article, as these require a high standard of independence and transparency in their approval.
Authors: Tshepo Herbert Mongalo, Mojalefa Reginald Mosala
Institution: University of the Witwatersrand
Language: English
Topic: Corporate Governance and Law
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $190
OpenAlex ID: W7109002938