Spisto, Michael (2005) Unitary board or two-tired board for the new South Africa? International review of business research papers, 1 (2). pp. 84-99. ISSN 1832-9543

Abstract

In South Africa, there is no doubt that the duties of company directors and managers are issues, which are attracting much attention at present. With rapidly developing and changing labour legislation in South Africa, it is essential to consider the extent to which South Africa should reassess its traditional principles of company law and corporate governance policies in order that it may take into account the participatory roles of employees in the workplace. It is considered that employee participation in decisionmaking in the corporation improves productivity standards and product quality. It has been shown in some countries, such as in the United Kingdom, that where workplacebased institutions for worker representation did not supplement adversarial labour relations, labour and management relations were exceedingly poor. This ultimately affected the efficiency and performance of the enterprise system as a whole. South Africa’s company law is largely based upon the unitary board structure created in England. The main purpose of this paper is to propose a new corporate governance model for South Africa, which would be advantageous to all of its corporate stakeholders. The current unitary board structure operating in South Africa is unacceptable, as it does not provide employees with rights enabling them to engage in the decision-making processes of the corporation with their employers at an adequate level. If South Africa hopes to successfully improve corporate productivity levels with its re-entry into international markets, it is proposed that a new two-tier German-based system of corporate governance be adopted, which would assist in improving management and labour relations and ultimately the productivity of the corporation.

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