A Comparative Analysis of the Identification of De Facto and Shadow Directors in South Africa, The United Kingdom and Australia

Abstract

Company law on de facto and shadow directors under the South African Companies Act 71 of 2008 is disconcertingly undeveloped. This weakness is worrying since South Africa has become notorious for the state capture of some key state-owned entities. In the light of similarities in the statutory definition of a ‘director’ in the South African Companies Act, the Companies Act 2006 in the United Kingdom and the Corporations Act 2001 in Australia this article evaluates whether guidance on the legal principles relating to de facto and shadow directors may be derived from these jurisdictions, where the law on this topic is more developed. It is argued that the definition of a ‘director’ in the South African Companies Act would be improved by certain amendments. Drawing on the Companies Act 2006 in the United Kingdom and the Corporations Act 2001 in Australia, a new statutory definition of a ‘director’ is proposed which would apply to both de facto and shadow directors.