Abstract
This research critically examines the director's duty to avoid conflicts of interest within South African company law. It explores how this duty operates to ensure that directors promote the best interests of the company.
The study identifies and analyzes the difficulties companies encounter under current company law, evaluates discrepancies between legal statutes and common law, and analyzes how courts understand and implement directors' duties. A major issue of this duty is the overlap and lack of clarity between the Companies Act 71 of 2008 and common law principles, leading to confusion in the application of directors’ duties.
This research conducts a comparative examination of the South African regulatory regime and the United Kingdom’s approach, concentrating specifically on the statutory rules governing directors’ duties to prevent conflicts of interest. It explores the areas where the two systems align and differ, while also identifying practical insights that South Africa could gain from the UK framework. Although the core principles in both jurisdictions are largely comparable, the United Kingdom provides a more organized and clearly articulated legal structure in this domain.
The finding indicates that the current laws do not completely eliminate inconsistencies or provide sufficient clarification on directors’ duties. The study recommends that the South African Companies Act should improve clarity and better align the company law with the existing common law.