Faculty of Commerce, Law and Management (ETDs)

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    Consideration of the interests of corporate stakeholders in addition to shareholders, in the approval of fundamental transactions under the companies act of 2008
    (University of the Witwatersrand, Johannesburg, 2024) Mdlongwa, Gugulethu; Mongalo, Tshepo
    In an attempt to grow markets and generate profits, companies often engage in fundamental transactions, among other activities. Fundamental transactions may change the share value and structure of a company. They are listed in Chapter 5 of the Companies Act 71 of 2008 to include the disposal of a greater part of the company’s assets, mergers and amalgamations and schemes of arrangements. In this research, financial assistance in section 45 is considered as a fundamental transaction because when effecting it, companies rely on the requirements that apply to fundamental transactions in Chapter 5. In addition, when not effected accordingly, financial assistance may threaten the structure of a company, as it may cause fluctuation of securities. Before effecting a fundamental transaction, companies must adhere to the general requirements, which include a notice to shareholders, an approval from shareholders through a special shareholder’s resolution, and compliance with the solvency and liquidity tests. On implementation, dissenting shareholders may rely on the appraisal rights remedy in section 164. This right gives protection to dissenting shareholders by invoking a process of valuation of shares to ensure fair compensation for their shares in a fundamental transaction. In so far as the consideration of the interests of stakeholders is concerned, the Act does not adequately protect all stakeholders in fundamental corporate decisions. The issue of stakeholder inclusion in fundamental transactions has not received serious attention from scholars, a gap which may be attributed to the prevailing focus on the shareholder primacy approach in corporate governance. This has overshadowed the consideration of other stakeholders as well as the complexity of balancing the interests of different stakeholders within a company. These complexities may deter researchers from delving into this multifaceted issue. This paper addresses the gap and focuses on the effects of the implementation of fundamental transactions – the worst being corporate failure – as attributable to the non-consideration of stakeholders such as employees, customers, and investors in corporate decision-making. This study makes recommendations for the consideration of the interests of all key stakeholders, in addition to shareholders, in financial transactions. It seeks to address the undesirable effects on them and promote good corporate practice to achieve sustainability in the company, which is of common interest to all stakeholders.
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    An institutional and stakeholder perspective of governance, ethics and trust in State Operated Enterprises
    (University of the Witwatersrand, Johannesburg, 2023) Manda, More Ickson
    State-Operated Enterprises (SOEs) in South Africa continue to face significant challenges impacting their performance. Governance and other ethical concerns have been identified as factors that have impacted the performance of SOEs. Consequently, trust in SOEs among stakeholders such as the state, business, civil society, and citizens has been eroded. This study explores corporate governance in SOEs using an institutional and stakeholder perspective to examine the relationship between trust, corporate governance, and ethics in institutions. The study is a quantitative study that uses a survey as its primary method of collecting data. Findings were triangulated with evidence from documents and literature. The study was conducted in South Africa, a middle-income developing country and young democracy confronted by many challenges, such as corruption, decreasing public trust and investor and businessconfidence. This has spotlighted theoretical and practical issues such as corporate governance. The study proposed a framework for strengthening trust and corporate governance to restore legitimacy in institutions, an essential factor in building strong, responsible, and capable institutions that deliver value to shareholders and stakeholders. The study also made practical recommendations for strengthening ethics, governance, and trust