A company represents several interests, which include interests of the shareholders, consumers, employees, environment and the community. Therefore, they are required to act in good faith and in the best interest of the company including all these interests.
After the enactment of the Companies Act 71 of 2008 in South Africa, it is quite apparent that the issues related to corporate governance are not merely regulate or governed by the Code of Best Practice, such issues are also dealt with under statutes (Rose and Sharfman 2015). The issues related to corporate social responsibility are more prominent in the Companies Act 2008 than in any other previous legislative acts in South Africa.
President Jacob Zuma has signed the Financial Intelligence Centre Amendment (FICA) bill into law that aims at combating money laundering and the financing of terrorism. He further stated that these amendments would lead to integrity and accountability in the South African financial system, which would enable the system to prevent financial crimes such as money laundering, tax evasion, illicit financial flow and financing of terrorism. It would also make it difficult for people who are engaged in illegal activities to hide behind legal bodies like trusts and shell companies. The measures shall enhance the due diligence requirements of the consumers to enable the entities comprehend the nature and potential risks that are posed by the customers.
According to section 7(d) of the Companies Act 2008, the statute confirms that it purports to reiterate the concept of the company as a means of attaining social and economic benefits. According to section 7(d) of the Companies Act 2008, the statute confirms that it purports to reiterate the concept of the company as a means of attaining social and economic benefits (Tricker and Tricker 2015).
From the above discussion I would like to say that those organisations who are under statutory obligation must comply with the same not as a legal obligation but as a matter of rights and protection.
Rose, P. and Sharfman, B.S., 2015. Shareholder Activism as a Corrective Mechanism in Corporate Governance.
Tricker, R.B. and Tricker, R.I., 2015. Corporate governance: Principles, policies, and practices. Oxford University Press, USA