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Corporate Governance in South Africa
Joint TUAC/HBS Paper on the corporate ownership structure, corporate governance regime and pension fund sector in South Africa.

14/01/2011

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This report is the outcome of a literature review on the corporate ownership structure, corporate governance regime and pension fund sector in South Africa. It is the latest in a series of Hans-Böckler-Foundation -TUAC discussion papers including “Workers’ Voice in Corporate Governance – A Trade Union Perspective” (2005), “World Bank Approach to Corporate Governance” (2006), “Corporate Governance in Sweden” (2008), “Pension Fund Investment in Private Equity” (2008) and “Corporate Governance in Brazil” (2010). As with the previous papers, the approach of this report has been to analyse the South African corporate governance system using the policy framework set out in the “Workers’ Voice” report of 2005. It focuses on two complementary trade union approaches to addressing workers’ rights in corporate governance: (i) worker participation and representation within the company (including rights to representation in the governing bodies), and (ii) the stewardship of workers’ capital invested in equity via their savings in pension funds.

The paper is structured as follows. Section 1 reviews the corporate governance system that prevailed under the apartheid regime and provides the policy context for the transition to democracy and an open economy after 1994. Section 2 outlines the main features of the current corporate governance regime based on the new Companies Act implemented in July 2010. From there, Section 3 of the paper discusses the distribution of power within the financial sector, and in particular the pension fund industry. Finally, Section 4 describes the evolution of the black empowerment policy of transferring corporate ownership and management from the Afrikaner and Anglo-American elites to the black and coloured majority of the population.

This report was prepared by Pierre Habbard, Senior Policy Advisor, Trade Union Advisory Committee (TUAC) to the OECD, for the Hans Böckler Foundation. The author is grateful to Roland Köstler (Hans-Böckler-Foundation), Kirsty Drew (TUAC) and Nicolas Pons-Vignon (University of the Witwatersrand) for their comments on this paper.

 

links:

04/05/2010| Corporate Governance in Brazil - An International Trade Union Perspective

04/03/2008| Corporate Governance in Sweden - An International Trade Union Perspective

01/09/2005| Workers’ Voice in Corporate Governance - A Trade Union Perspective