South Africa tightens up corporate governance
Audit committees to be made up purely of NEDs
In a move which follows international corporate governance trends, South
Africa is tightening up its own rules by proposing that audit committees of
listed companies should consist only of independent non-executive directors.
The Corporate Law Amendment Bill, if passed with mean that an audit committee
must have at least two members and consist only of non-executive directors of
the company who must act independently, Business Day reported.
Devon Duffield, KPMG South Africa’s managing director of professional
practice development, said the experience and expertise that NEDs brought to
boards was invaluable and vital to the success of the economy.
However, the new measures are likely to see smaller companies struggle to
find suitably qualified and competent candidates to fill the positions.
With 685 listed companies on the Johannesburg Stock Exchange, a minimum of
1,400 positions will need to be filled on audit committees.