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Gross misconduct. Dishonesty. Recklessness - what 'delinquent director' means

2 June 2020 9:15 AM
Tags:
South African Airways
SAA
Dudu Myeni
OUTA
Pretoria High Court
Director
Refilwe Moloto
management
Breakfast with Refilwe Moloto
Delinquency case against Dudu Myeni
Fay Mukaddam
fiduciary duties
fiduciary duty
directorship
oversight

Only very serious wrongdoing will get one declared a “delinquent director for life”, says Advocate Fay Mukaddam.

Dudu Myeni is a “delinquent director for life”, ruled the Pretoria High Court last week.

Dudu Myeni. Picture: The Presidency/Flickr

The former South African Airways (SAA) Chairperson acted recklessly and broke her fiduciary duty, the High Court found, saying that the people of South Africa and SAA's employees are paying the price for her actions.

Judge Ronel Tolmay called Myeni “a director gone rogue without the slightest consideration for her fiduciary duty to SAA”.

Ms Myeni is not a fit and proper person to be appointed as a director of any company, let alone an SOE, she said.

The law requires directors to act in good faith and in the best interest of the company they serve.

The “fiduciary duties” of directors in South Africa include:

  • The duty of care – to act with a certain level of skill, competence and diligence.

  • The duty of loyalty - to act honestly and in good faith, and in the best interests of the organisation.

Refilwe Moloto asked Advocate Fay Mukaddam (Chartered Director and Technical Advisor at the IoDSA) to help her better understand the fiduciary duty of directors.

A delinquent director is somebody who has been found wanting because of gross misconduct where you have acted dishonestly, with gross negligence and recklessly in terms of your fiduciary duty. Not acting in the entity’s best interest or taking the necessary care and skill in looking after the interest of all those in the ecosystem of the entity.

Advocate Fay Mukaddam, Chartered Director - IoDSA

If you have an oversight or error of judgment or misdemeanour – that doesn’t qualify… [Being found to be a delinquent director] talks to serious misconduct… Gross negligence and an attitude of reckless disregard of the consequences… completely without concern… while being fully aware of the harm to the company and stakeholders.

Advocate Fay Mukaddam, Chartered Director - IoDSA

The board has an oversight role… but it’s not a management role. There must be a separation and clear delineation in terms of the roles and responsibilities…

Advocate Fay Mukaddam, Chartered Director - IoDSA

I cringe when people say they’re a professional director… You have to avoid conflicts of interest and not act for your own gain… The board has to take note of how their decisions will impact on all the stakeholders…

Advocate Fay Mukaddam, Chartered Director - IoDSA

Listen to the interview in the audio below.


2 June 2020 9:15 AM
Tags:
South African Airways
SAA
Dudu Myeni
OUTA
Pretoria High Court
Director
Refilwe Moloto
management
Breakfast with Refilwe Moloto
Delinquency case against Dudu Myeni
Fay Mukaddam
fiduciary duties
fiduciary duty
directorship
oversight

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