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Companies Act, 2008 (Act No. 71 of 2008)

Companies Regulations, 2011

Chapter 3 : Enhanced Accountability and Transparency

43. Social and Ethics Committee

 

 

See section 72(4) to (10)

 

(1) This regulation applies to—
(a) every state owned company;
(b) every listed public company; and
(c) any other company that has in any two of the previous five years, scored above 500 points in terms of regulation 26(2).

 

(2) A company to which this regulation applies must appoint a social and ethics committee unless—
(a) it is a subsidiary of another company that has a social and ethics committee, and the social and ethics committee of that other company will perform the functions required by this regulation on behalf of that subsidiary company; or
(b) it has been exempted by the Tribunal in accordance with section 72 (5) and (6).

 

(3) A board of a company that is required to have a social and ethics committee, and that—
(a) exists on the effective date, must appoint the first members of the committee within 12 months after—
(i) the effective date; or
(ii) the determination by the Tribunal of the company's application, if any, if the Tribunal has not granted the company an exemption;
(b) is incorporated on or after the effective date, must constitute a social and ethics committee and appoint its first members within one year after—
(i) its date of incorporation, in the case of a state owned company;
(ii) the date it first became a listed public company, in such a case; or
(iii) the date it first met the criteria set out in sub-regulation (1)(c), in any other case.

 

(4) A company's social and ethics committee must comprise not less than three directors or prescribed officers of the company, at least one of whom must be a director who is not involved in the day-to-day management of the company's business, and must not have been so involved within the previous three financial years.

 

(5) A social and ethics committee has the following functions:
(a) To monitor the company's activities, having regard to any relevant legislation, other legal requirements or prevailing codes of best practice, with regard to matters relating to—
(i) social and economic development, including the company's standing in terms of the goals and purposes of—
(aa) the 10 principles set out in the United Nations Global Compact Principles; and
(bb) the OECD recommendations regarding corruption;
(cc) the Employment Equity Act; and
(dd) the Broad-Based Black Economic Empowerment Act;
(ii) good corporate citizenship, including the company's—
(aa) promotion of equality, prevention of unfair discrimination, and reduction of corruption;
(bb) contribution to development of the communities in which its activities are predominantly conducted or within which its products or services are predominantly marketed; and
(cc) record of sponsorship, donations and charitable giving;
(iii) the environment, health and public safety, including the impact of the company's activities and of its products or services;
(iv) consumer relationships, including the company's advertising, public relations and compliance with consumer protection laws; and
(v) labour and employment, including—
(aa) the company's standing in terms of the International Labour Organization Protocol on decent work and working conditions; and
(bb) the company's employment relationships, and its contribution toward the educational development of its employees;
(b) to draw matters within its mandate to the attention of the Board as occasion requires; and
(c) to report, through one of its members, to the shareholders at the company's annual general meeting on the matters within its mandate.