One of the housekeeping matters that hashtagcompanysecretaries “CS” should be keeping track of as we wrap up 2023 is scheduling an annual declaration of conflicts of interest with the hashtagboardofdirectors and hashtagseniormanagement. This typically involves the CS prompting that the coming years declaration is due provide a background why completing the annual declaration is important, a timeline by when it should be completed and attach the existing conflicts of interest policy to support the process. The form itself should be easy to complete, comprehensive and allow for completeness in disclosure
A hashtagconflictsofinterest according to the Capital Markets Code of Corporate Governance Practices for Issuers of Securities to the Public 2015 define it as ” a situation that has the potential to undermine the impartiality of a person because of the possibility of a clash between the person’s self- interest and professional interest or public interest”. Conflicts limit the duty of a director to remain independent as per section 144 &146 of the Companies Act 17 of 2015 where a director of a Company is to avoid situations where personal or family (spouse, child, parent, sibling or immediate family members whether by blood or marriage -According to the Mwongozo Code of Governance) interests conflict with the interests of the company. These may include property that belongs to a director, confidential information in the hands of a director, a director’s position in the company and opportunities that are available for the company.
Dependent on the type of entity and the regulation that governs it, there are various ways to deal with hashtagconflictsofinterest , primary of which is to disclose them before a situation arises, exclude oneself from decision making on those situations and in some instances, the other directors may then deliberate and decide how the conflict may be dealt with. This avoids instances of voidable decisions and transactions that affect the organisation.
A CS may be proactive about managing conflicts by scheduling a formal annual declaration of any personal or family financial or other actual or potential interests with the requirement to update the annual declaration should any changes arise. This should be a continuing practice at the start of every board season and as an agenda item at every meeting, based on the matters up for discussion, and entered into a conflicts of interest register. The register is a statutory register to be maintained throughout the existence of the company.
Should any declarations arise during a meeting, the CS should guide that upon the matter being declared, it should be discussed and voted on and thereafter recorded in the hashtagminutes , as to its nature, the discussion and the decision taken. This safeguards the organisation and allows for independence in the meeting. Elevate your CS game with these proactive advisory nuggets, powered by Akira Consult.
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