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The DTI Seeks to Advance the Role of Social and Ethics Committees within South African Companies

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The DTI Seeks to Advance the Role of Social and Ethics Committees within South African Companies:

The Department of Trade and Industry (the dti) in partnership with the Companies Tribunal will host a seminar with the aim of advancing the role of Social and Ethics Committees (SECs) in South African companies. The seminar will take place in Midrand on Thursday, 9 February 2017.

The purpose of the seminar is to discuss how SECs can be made more effective in such a manner that creates value not only for the company but also its stakeholders, employees, consumers, communities and investors amongst others. The seminar also aims to raise more awareness about SECs and encourage activism of these Committees.

The Acting Deputy Director-General for the Consumer and Corporate Regulations Division of the dti, Mr MacDonald Netshitenzhe says the SECs are a statutory board committee that play an important role by ensuring that companies act in a responsible manner, as well as contribute to the economic and social development of the communities in which they operate.

“Companies have a legal requirement to establish SECs. Section 72 (4) and Regulation 43 of the Companies Act, require that all listed public companies, state owned companies and any other company that score above 500 public interest points must have a social and ethics committee,” adds Netshitenzhe.

He says the rationale for the establishment of the SECs is that companies have a significant economic and social impact on the communities in which they operate, and as such need to act as responsible corporate citizens.

“Companies should not only be profit-driven but also concern themselves with the sustainability of the communities in which they are located. Available evidence suggests that 50% of companies that were supposed to have SECs had set up such a committee by 1 May 2012. Only 41% of companies felt that their SEC understood its mandate, and 11% of the companies indicated a strong awareness of the role and functions of SEC within the company,” he highlights.

According to Netshitenzhe, government’s view is that SECs should not only start functioning as envisaged by the Companies Act but should also be effective. He says properly constituted and functioning SECs should significantly contribute towards holding companies accountable for their social and ethical conduct.

“The company through guidance from its SEC needs to be socially responsible, ethical and have an impact on the communities in which it operates by way of tangible outcomes,” he adds.

The Chairperson of the Companies Tribunal Advocate Simmy Lebala, SC says applications for exemption from appointing SECs are handled by the Companies Tribunal and to date the Tribunal had adjudicated 227 applications for exemptions from establishing SECs, and out of those applications 92 were granted, while 135 applications were either refused or dismissed.

The seminar will be attended by government officials, private sector, non-profit organisations as well as other entities of government.

Distributed by APO on behalf of The Department of Trade and Industry, South Africa.

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Source: APO – Africa-Newsroom: latest news releases related to Africa.

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