LML4806 ASSIGNMENT 2(COMPLETE ANSWERS)SEMESTER 2 2023...GRADED A+...100% RELIABLE AND WELL EXPLAINED ANSWERS AND EXPLANATIONS.WISHING YOU ALL THE BEST ON YOUR EXAM..........Question: 1 With reference to appropriate authority, discuss the appointment and composition of the social and ethics committe...
, Question: 1 With reference to appropriate authority, discuss the appointment and
composition of the social and ethics committee. (5)
In South African company law, the appointment and composition of the social and ethics
committee is governed by the Companies Act of 2008. According to section 72 of the Act, a
company must appoint a social and ethics committee if it meets at least one of the following
criteria:
It is a public company with a primary listing on the Johannesburg Stock Exchange (JSE)
or any other exchange as prescribed by the Minister of Trade and Industry.
It is a state-owned company listed on the JSE or subject to regulations made under the
Public Finance Management Act.
It has a fiduciary duty to a pension fund or similar institution. The authority to appoint
the social and ethics committee lies with the board of directors of the company. The
board must establish the committee within three months of the company meeting the
above-mentioned criteria.
The composition of the social and ethics committee is also specified in the Companies
Act. It must consist of a minimum of three directors or prescribed officers of the
company, with at least one of them being an independent director or prescribed officer.
An independent director is someone who is not a full-time employee of the company or
its subsidiaries and does not have a material contractual relationship with the company.
The Act further requires that the majority of the members of the committee must be non-
executive directors or prescribed officers. A non-executive director is someone who is
not involved in the day-to-day management of the company and does not have an
employment contract with the company. It is important to note that the Act allows for
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