IIE Learn Module Outline GOET7312

Governance and Ethics

GOET7312
MODULE OUTLINE 2023

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of 1978, no part of this manual may be reproduced or transmitted in any form or by any means,
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IIE Learn Module Outline GOET7312

Table of Contents

Introduction ............................................................................................................................................ 3
Using this Module Outline ...................................................................................................................... 4
This Module on Learn ............................................................................................................................. 5
Icons Used in this Document and on Learn ............................................................................................ 6
Module Resources .................................................................................................................................. 7
Module Purpose .................................................................................................................................... 13
Module Outcomes ................................................................................................................................ 13
Assessments .......................................................................................................................................... 14
Module Pacer ........................................................................................................................................ 16

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IIE Learn Module Outline GOET7312

Introduction
Welcome to the module on Governance and Ethics.

There have been changes in the corporate world as new trends have started to emerge. Trends
such as: Stakeholders calling for an increase in the diversity of the boards of directors and
shareholders want to be included in company decisions and management topics. The world of
business has been altered drastically due to the increase of technology, which presents more
opportunities and increases the corporation’s exposure to risk. Debates over the role and
powers of the board of directors have increased considerably due to a mass of corporate
scandals that have seen many companies close their doors.

It is not surprising that the field of corporate governance has received a renewed focus both
locally and abroad calling for more rigorous checks and balance and greater independence of
members of the board of directors. Communities increasingly demand that ethical behaviour
become an integrated part of businesses.

The purpose of this module is for students to understand the need for creating a collective set
of values within an organisational business ethics framework and to understand how ethics
can impact business profitability. The module will equip students with an understanding of
business in relation to the community’s ethical framework including concepts of transparency
and social responsibility. The module will seek to expose students to various aspects of
governance which include the governance environment of South African companies, the
auditor and his duties within a company, financial records and reporting and the auditor’s
liability both civilly and criminally. The module summarises the identification, mitigation, and
management of risk within an organisation. Through the introduction of this module, students
will gain the basic understanding of how groups of companies operate, how shareholders and
directors participate and contribute to the running and progress of the company.

Your textbook Corporate Governance: An Essential Guide for South African Companies contains
much reference to the King IV™ report on Corporate Governance. The King IV report, to the
extent that it is contained in the prescribed textbook therefore forms part of the learning
material for this module. The full The King IV™ report on Corporate Governance can be found
at: http://www.adamsadams.com/wp-content/uploads/2016/11/King-IV-Report.pdf

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IIE Learn Module Outline GOET7312

Using this Module Outline

This module outline has been developed to support your learning. Please note that the content
of this module is on Learn as well as in the prescribed material. You will not succeed in this
module if you focus on this document alone.

• This document does not reflect all the content on Learn, the links to different resources,
nor the specific instructions for the group and individual activities.
• Your lecturer will decide when activities are available/open for submission and when
these submissions or contributions are due. Ensure that you take note of
announcements made during lectures and/or posted within Learn in this regard.

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IIE Learn Module Outline GOET7312

This Module on Learn

Learn is an online space, designed to support and maximise your learning in an active manner.
Its main purpose is to guide and pace you through the module. In addition to the information
provided in this document, you will find the following when you access Learn:

• A list of prescribed material;

• A variety of additional online resources (articles, videos, audio, interactive graphics, etc.)
in each learning unit that will further help to explain theoretical concepts;
• Critical questions to guide you through the module’s objectives;
• Collaborative and individual activities (all of which are gradable) with time-on-task
estimates to assist you in managing your time around these;
• Revision questions, or references to revision questions, after each learning unit.

Kindly note:

• Unless you are completing this as a distance module, Learn does not replace your
contact time with your lecturers and/or tutors.
• This is a Learn module, and as such, you are required to engage extensively with the
content on the Learn platform. Effective use of this tool will pro0vide you with
opportunities to discuss, debate, and consolidate your understanding of the content
presented in this module.
• You are expected to work through the learning units on Learn in your own time –
especially before class. Any contact sessions will therefore be used to raise and
address any questions or interesting points with your lecturer, and not to cover every
aspect of this module.
• Your lecturer will communicate submission dates for specific activities in class and/or
on Learn.

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IIE Learn Module Outline GOET7312

Icons Used in this Document and on Learn

The following icons are used in all your modules on Learn:

Icon Description

A list of what you should be able to do after working through the learning
unit.

Specific references to sections in the prescribed work.

Questions to help you recognise or think about theoretical concepts to be

covered.

Sections where you get to grapple with the content/ theory. This is mainly
presented in the form of questions which focus your attention and are
aimed at helping you to understand the content better. You will be
presented with online resources to work through (in addition to the
textbook or manual references) and find some of the answers to the
questions posed.

Opportunities to make connections between different chunks of theory in

the module or to real life.

Real life or world of work information or examples of application of

theory, using online resources for self-exploration.

REMEMBER:

You need to log onto Learn to:

• Access online resources such as articles, interactive graphics, explanations, video clips,
etc. which will assist you in mastering the content; and
• View instructions and submit or post your contributions to individual or group activities
which are managed and tracked on Learn.

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IIE Learn Module Outline GOET7312

Module Resources
Prescribed • Naidoo, R An Essential Guide for South African Companies 3rd ed
Material (PM) (2018) Lexis Nexis: Durban.
for this Module ISBN: 978 0409 009484

• South African Company Law for the 21st Century: Guidelines for Law
Reform GN 1183 GG 26493 of 23 June 2004, available at
https://www.gov.za/documents/south-african-company-law-21st-
century-guidelines-corporate-law-reform-0 [Accessed 26 May 2023].

• The Companies Act 71 of 2008. Please note: For assessment purposes,

students are only required to study those sections of the Act as
referred to in the prescribed textbook).

• IODSA King IV Report on Corporate Governance for South Africa

available at https://www.saica.co.za/Technical/LegalandGovernanc
e/King/tabid/2938/language/en-ZA/Default.aspx [Accessed 26 May
2023]. (Please note: For assessment purposes, students are only
required to study those sections of the King IV report as referred to
in the prescribed textbook).

• JSE Ltd Listing Requirements available at

https://www.jse.co.za/regulation/companies-issuer-
regulation/listing-requirements/listing-jse [Accessed 26 May 2023].
(Please note: For assessment purposes, students are only required to
study those sections of the document as referred to in the prescribed
textbook and sections 4.8, 4.9 & 4.10)

• Garratt, B The Fish Rots from the Head: The Crisis in Our Boardrooms:
Developing the Crucial Skills of the Competent Director (2003) 109-
136 & 146-152 – fully available on Ebscohost through the IIE Library
Website.

• Khomba Redesigning the balanced scorecard model: An African

Perspective (doctoral thesis), University of Pretoria) 2011. (Available
at https://repository.up.ac.za/handle/2263/28706 [Accessed 26 May
2023].

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IIE Learn Module Outline GOET7312

• Deloitte King IV Ethical Leadership and the governance of ethics

Report 2017 website at
https://www2.deloitte.com/za/en/pages/africa-centre-for-
corporate-governance/articles/kingiv_ethical_leadership.html
[Accessed 26 May 2023].

• Enron: The smartest guys in the room (2005) documentary directed

by Alex Gibney available at https://watchdocumentaries.com/enron-
the-smartest-guys-in-the-room/ [Accessed 26 May 2023].

• The crooked E: The unshredded truth about Enron (2003)

Thabane, T &Snyman van Deventer, E Pathological Corporate
Governance Deficiencies in South Africa’s State-Owned Companies:
A Critical Reflection 2018 PELJ (21) 2.
https://www.researchgate.net/publication/323416544_Pathological
_Corporate_Governance_Deficiencies_in_South_Africa's_State-
Owned_Companies_A_Critical_Reflection [Accessed 26 May 2023].

• Killian, C A practical explanation of ethics as a good corporate

governance principle in South Africa and New Zealand -A case study
2020 available at
http://www.scielo.org.za/scielo.php?script=sci_arttext&pid=S2304-
85572020000100004 [Accessed 26 May 2023].

• Canter, A SA Counts Cost of Poor Governance 2 March 2019

https://mg.co.za/article/2018-03-02-00-sa-counts-cost-of-poor-
governance/ [Accessed 26 May 2023].

• Cheteni, P & Khamfula, Y State Owned Enterprises in South Africa: A

Pinnocchio Paradox (1 January 2018) AfriGriwth Agenda available at
https://www.researchgate.net/publication/341410997_Governmen
t_assistance_to_state-
owned_enterprises_a_hindrance_to_financial_performance
[Accessed 26 May 2023].

• Mongalo, T “An overview of company law reform South Africa: From

the Guidelines to the Companies Act 2008” 2010 available at
https://open.uct.ac.za/butstream/handle11427/16548/Mongalo_An
_overview_company_law_2010.pdf?sequence=1 [Accessed 26 May
2023].

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IIE Learn Module Outline GOET7312

• Cassim, M South African Airways makes an emergency landing into

business rescue: some burning issues 2020 SALJ (137) 201-214.

• Arden D Piercing the corporate veil -old metaphor, modern practice?

2017 (1) JCCL&P 1 (available on the student portal).

• Esser, I & Delport, P The protection of stakeholders: The South African

social and ethics committee and the United Kingdom’s enlightened
shareholder value approach: Part 1 De Jure (2017) 97-110.

• SAICA Mandatory Audit Firm Rotation Discussion Paper: Considering

mandatory Audit Firm Rotation (MAFR) (and other Related Measures)
as Possible Means of Enhancing Auditor Independence available at
http://www.saica.co.za/Portals/0/documents/MAFRDiscussionPaper
.pdf?ReferenceID=45018384 [Accessed 26 May 2023].

• Kloppers, H Driving corporate social responsibility (CSR) through the

Companies Act: An overview of the role of the social and ethics
committee 2013 PER (16) 1.

• Polity Corporate Social Responsibility in South Africa: More than a

nice intention available at
https://www.polity.org.za/article/corporate-social-responsibility-in-
south-africa-more-than-a-nice-intention-2011-09-12 [Accessed 26
May 2023].

• PwC South Africa State-owned companies: The new Companies Act,

PFMA, and King III in perspective August 2021 available at
https://www.pwc.co.za/en/assets/pdf/companies-act-steering-
point-4.pdf [Accessed 26 May 2023].

• United Nations Global Compact website available at

https://www.unglobalcompact.org/what-is-gc/mission/principles
[Accessed 26 May 2023].

• Compliance Online “OECD Principles of Corporate Governance”

2021 website available at
https://www.complianceonline.com/dictionary/OECD_Principles_of
_Corporate_Governance.html [Accessed 26 May 2023].

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• International Corporate Governance Network “ICGN Global

Governance Principles” 2014 available at
https://www.fsa.go.jp/en/refer/councils/corporategovernance/refer
ence/icgn.pdf [Accessed 26 May 2023].

• IODSA Director’s duties and liability 2017 media statement available

at https://www.iodsa.co.za/news/378187/Directors-duties-and-
liability.htm [Accessed 26 May 2023].

• Thabane, T &Snyman van Deventer, E Pathological Corporate

Governance Deficiencies in South African State-Owned Companies: A
Critical Reflection 2018 PELJ (21) 2.

• “JSE amends listing requirements to cut red tape and create an

enabling environment”. https://www.jse.co.za/news/news/jse-
amends-listings-requirements-cut-red-tape-and-create-enabling-
environment [Accessed 26 May 2023].
Prescribed Cases • Economic Freedom Fighters v Speaker of the National Assembly and
Others, democratic Alliance v Speaker of the National Assembly and
others [2016] ZACC 11.

• South African Broadcasting Corporation Ltd v Mpofu and anther

[2009] 4 All SA 169 (GSJ).

• Organisation Undoing Tax Abuse v Myeni [2020] 2 All SA 578 (GP).

• Airport Cold Storage (Pty) Ltd v Ebrahim 2008 (2) SA 303 (C).

• Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd 1995 (4)
SA 790 (A).

• Hulse-Reutter v Godde 2001 (4) SA 1336 (SCA).

• Levenstein v the State [2013] 4 All SA 528 (SCA).

• S v Brown [2015] All SA 452 (SCA).

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IIE Learn Module Outline GOET7312

• Company Secretary of Acrelormittal SA v Vaal Environmental Justice

Alliance (69/2014) [2014] ZASCA 184.

• Democratic Alliance v South African Broadcasting Corporation Soc Ltd

and Others (12497/2014) [2015]

• ZAWCHC 182; [2016] 1 All SA 504 (WCC); 2016 (3) SA 468 (WCC) (27
November 2015)

• Fisheries Development Corporation of SA Ltd v AWJ Investments (Pty)

Ltd 1980 (4) SA, 156;

• Howard v Herrigel 1991 (2) SA 660 (A);

• Kebble v The Minister of Water Affairs and Forestry JDR 0872 (SCA)

• Minister of Water Affairs and forestry v Stilfontein Gold Mining Co Ltd

2006 (5) SA 333(W);

• Msimang NO and Another v Katuliiba and Others [2013] 1 All SA 580

(GSJ)

• Mthimunye-Bakoro v Petroleum Oil and Gas Corporation of South

Africa (SOC) Limited and Another (12476/2015) [2015] ZAWCHC 113;
2015 (6) SA 338 (WCC) (4 August 2015)

• Robinson v Randfontein Gold Estates Gold Mining Co Ltd 1921 AD

168;

• Sibex Construction (SA) (Pty) Ltd v Injectaseal CC 1988 2 SA 54 (T)

• Thoroughbred Breeders' Association of South Africa v Price

Waterhouse [2001] 4 All SA 161 (A);

• United Peoples Union of South Africa v Registrar of Labour Relations

(J2252/09) [2011] ZALCJHB 275 (15 February 2011).

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IIE Learn Module Outline GOET7312

Recommended The following titles include information related to this module and may
Readings, be consulted as additional resources. Please note, however, that you will
Digital, and Web not be tested on any content from these titles:
Resources
• Cassim, FHI et al. (2012) The Law of Business Structures Juta:
Cape Town.
• Davis, D. ed. 2021. Companies and Other Business Structures in
South Africa 5th ed. Oxford University Press: Cape Town
Module You will find an overview of this module on Learn under the Module
Overview Information link in the Course Menu.
Assessments Find more information on this module’s assessments in this document
and on the Student Portal.

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IIE Learn Module Outline GOET7312

Module Purpose
The purpose of this module is for students to understand the need for creating a collective
set of values within an organisational business ethics framework and to understand how
ethics can impact business profitability. The module will equip students with an
understanding of business in relation to the community’s ethical framework including
concepts of transparency and social responsibility. The module will seek to expose
students to various aspects of governance which include the governance environment of
South African companies, the auditor and his duties within a company, financial records
and reporting and the auditor’s liability both civilly and criminally. The module summarises
the identification mitigation and management of risk within an organisation. Through the
introduction of this module, students will gain the basic understanding of how groups of
companies operate, how shareholders and directors participate and contribute to the
running and progress of the company.
Module Outcomes
MO1 Examine the concept of governance.
Examine the concept of values and recognise the influence upon a company of
MO2
business ethics
Utilize practice-based terminology to understand how governance and
MO3
regulatory measures are applied in the business environment.
Analyse principles of ethics and ethical leadership by presenting a critical
MO4
understanding of the importance of business ethics in a business setting.
Interpret the importance of risk management as a key role of the board of
MO5
directors to advance and manage risk in a business environment.
Analyse the legal duties of the directors to evaluate their fiduciary duties and
MO6
their duties of care and skill.

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IIE Learn Module Outline GOET7312

Assessments
Integrated Curriculum Engagement (ICE)
Minimum number of ICE activities to complete 4
Weighting towards the final module mark 10%

Formatives Test 1 Test 2

Weighting 25% 30%
Marks 60 60
Duration 1 hour 1 hour
Write/Submit after 1 3
Learning Units covered 1 2-3
Resources required Additional research Additional research

Summative Written Unseen Exam

Weighting 35%
Duration 2 hours
Total marks 120
Resources required None
Learning Units covered All

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IIE Learn Module Outline GOET7312

Assessment Preparation Guidelines

Format of the Assessment Preparation Hints
Tests
The tests will be based on • Ensure that you work through all the relevant activities,
learning units 1-3. • exercises and revision questions on Learn and in your
The tests will include both textbook.
theory and application-type • Brainstorm possible questions based on the learning
questions. • outcomes and objectives provided. Then complete
You will be expected to these as practise-questions.
respond to short theory- • Pay attention to the instruction words (like list, apply,
based questions, as well as describe etc.) and to the mark allocations of each
longer application type question to ensure that you are able to provide the
questions. correct depth and detail in your answers.
• Make sure that you have mastered the objectives in
Test 1 – LU1 Learning Units 1, 2 and 3.
Test 2 – LU2-3
Examination
The examination will assess To prepare effectively for this written unseen examination
all learning units in this you can include the following in your preparation:
module and will include
both theory and • Ensure that you work through all the revision questions
application-type questions. for all of the learning units.
• Work through previous assessments.
You will be expected to
respond to short theory-
based questions, as well as
longer application-type
questions.

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IIE Learn Module Outline GOET7312

Module Pacer
Code Programme Contact Sessions Credits
GOET7312 Bachelor of Commerce in Law 36 15
Learning Unit 1 An Introduction to Corporate Governance and ethics

Overview:

The concept of corporate governance has been particularly relevant within the South African
context as recent years have seen the collapse of both private as well as state-owned entities
due to poor corporate governance practices, corruption, and general maladministration. To
lessen the devastating effects on the South African economy and the resultant dire
consequences that corporate collapse continues to have on members of South Africa’s
public, it is imperative to incorporate good corporate governance principles in the governing
of all companies, whether private or state-owned.

Ethics is linked to corporate governance and a complex relationship exists between them.
Before one can identify the interrelationship between ethics and Corporate Governance, a
clear understanding of the concept of corporate governance is required, as well as an
understanding of the principles articulated in the latest King IV report.

In this learning unit, we will look at the concept of corporate governance and its importance,
briefly explore specific corporate governance concepts, and discuss business ethics and
ethical leadership in the South African context.

Please work through Themes 1, 2, and 3 on Learn, together with the relevant sections of
your prescribed source/s. To ensure that you are working towards mastering the objectives
for this learning unit, please also ensure that you complete all activities on Learn.

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IIE Learn Module Outline GOET7312

Learning Unit 1: Introduction to Corporate Governance and Ethics

Sessions: Theme 1: The concept of Corporate Prescribed Material (PM)
1-6 Governance
LO1: Explain what the notion of PM1: Chapter 1
Related corporate governance entails.
Outcomes: LO2: Describe how corporate governance Garratt, B The Fish Rots
MO001 regulates the exercise of power from the Head: The Crisis in
within an organisation. Our Boardrooms:
LO3: Critically analyse how company Developing the Crucial Skills
culture is often connected to of the Competent Director
corporate governance failure. (2003) 109-136 & 146-152 –
LO4: Explain how ownership of a fully available on Ebscohost
company is most often separated through the IIE Library
from actual control of a company. Website.
LO5: Distinguish between corporate
governance and management.
LO6: Describe the different roles that the
board of directors and those in
management positions have in the
governance of a company with
specific reference to:
• Accountability
• Responsibility
• Authority.
LO7: Explain how the balance between
power and accountability may be
achieved.
LO8: Explain where authority originates
from in a company and how it is
delegated.
Theme 2: The importance of corporate PM: Chapter 2
governance
LO9: Analyse the importance of good Enron: The smartest guys in
corporate governance with the room (2005)
reference to the following: documentary directed by
• Access to capital Alex Gibney available at
• Foreign direct investment https://watchdocumentarie
• Corruption s.com/enron-the-smartest-
• Investor responsibility guys-in-the-room/
(Accessed 31 March 2023)

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IIE Learn Module Outline GOET7312

• Public demand for The crooked E: The

accountability unshredded truth about
• Shareholder activism Enron (2003)
• In dealing with change https://www.researchgate.
• By using corporate governance net/publication/323416544
as a competitive advantage; _Pathological_Corporate_G
and overnance_Deficiencies_in_
• The effect of corporate South_Africa's_State-
governance on company Owned_Companies_A_Criti
performance. cal_Reflection

Canter, A SA Counts Cost of

Poor Governance 2 March
2019
https://mg.co.za/article/201
8-03-02-00-sa-counts-cost-
of-poor-governance/
[Accessed 26 May 2023].
Theme 3: Ethical Leadership and PM1: Chapters 1 [1.2] and
transformative constitutionalism 17
LO11: Explain how the concepts of
governance and leadership are Chapter 6 of the following
interrelated. doctoral thesis:
LO12: Distinguish between the concepts
of ethics, morals, and values. Khomba Redesigning the
LO13: Analyse how the concept of ethics balanced scorecard model:
in a corporate setting is An African Perspective
foundational in the King IV code. (doctoral thesis), University
LO14: Explain how an ethical culture can of Pretoria) 2011. (Available
be created within an organisation. at
LO15: Discuss key ethical issues for South https://repository.up.ac.za/
African companies in the 21st handle/2263/28706
century. [Accessed 26 May 2023].
LO16: With reference to the prescribed
cases under this theme, critically Killian, C (2020) A practical
analyse they ways in which The explanation of ethics as a
Constitution, 1996, recognises the good corporate governance
following: principle in South Africa and
• The importance of good New Zealand - A case study
corporate governance, http://www.scielo.org.za/sci
generally; elo.php?script=sci_arttext&

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IIE Learn Module Outline GOET7312

• The effect of the underlying pid=S2304-

constitutional value of ubuntu 85572020000100004
as it relates to corporate [Accessed 26 May 2022].
governance; and
• The more onerous obligations Deloitte King IV Ethical
placed on the State and state- Leadership and the
owned enterprises to comply governance of ethics Report
with principles of good 2017 website at
corporate governance. https://www2.deloitte.com/
za/en/pages/africa-centre-
for-corporate-
governance/articles/kingiv_
ethical_leadership.html
[Accessed 26 May 2023].

South African Broadcasting

Corporation Ltd v Mpofu
and another [2009] 4 All SA
169 (GSJ) 55-66.

Economic Freedom Fighters

v Speaker of the National
Assembly and Others,
Democratic Alliance v
Speaker of the National
Assembly and others [2016]
ZACC 11.

Organisation Undoing Tax

Abuse v Myeni [2020] 2 All
SA 578 (GP).

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IIE Learn Module Outline GOET7312

Learning Unit 2 The Legal and Regulatory framework of Corporate Governance in

South Africa

Overview:

From an international perspective, corporate governance is further guided by corporate

governance guidelines and common international corporate governance principles. These
principles also extend to the South African corporate governance framework.

In South Africa, the corporate governance statutory framework consists of the common law,
the Companies Act, the King IV Report, and the Johannesburg Stock Exchange (JSE) Listing
Requirements. Compliance with some of these instruments is mandatory, whilst with others,
it is merely voluntary. This is because South Africa’s approach to corporate governance is
along the lines of a hybrid system. The pieces of regulatory instruments that apply to a
company and the extent to which such compliance is mandatory, depends on the specific
circumstances and the provisions contained in these regulatory instruments.

In this learning unit, we will look at the international framework for corporate governance,
the Companies Act, King IV and the JSE Listing Requirements, as well as the extent to which
these instruments incorporate corporate governance principles and how they interact with
one another. Furthermore, we will briefly explore transformative constitutionalism within
the South African regulatory framework of corporate governance.

Please work through Themes 1, 2, 3 and 4 on Learn, together with the relevant sections of
your prescribed source/s. To ensure that you are working towards mastering the objectives
for this learning unit, please also ensure that you complete all activities on Learn.

© The Independent Institute of Education (Pty) Ltd 2023 Page 20 of 37

IIE Learn Module Outline GOET7312

Learning Unit 2: Themes

Sessions: Theme 1: The South African Legal and Prescribed Material (PM)
7-12 Regulatory Framework
Related LO1: Briefly describe the purpose and PM: Chapter 3
Outcomes: general content of corporate
MO001 governance guidelines established Note: Students must refer to
by these international organisations: the following only in so far
• United Nations (UN) Global as it is necessary to meet
Compact the learn outcomes under
• The Organisation for this theme -It is not
International Co-operation and necessary for students to
Development (OECD) study the entire contents of
Corporate Governance these documents.
Guidelines
• International Corporate United Nations Global
Governance Network (ICGN) Compact website available
Global Governance Principles. at
LO2: Describe in general terms how https://www.unglobalcomp
international corporate governance act.org/what-is-
guidelines and common gc/mission/principles
international corporate governance [Accessed 26 May 2023].
principles informed the need of the
Department of Trade and Industry Compliance Online “OECD
(DTI) to address corporate law Principles of Corporate
reform in South Africa. Governance” 2021 website
LO3: Describe how corporate governance available at
came to be institutionalised in South https://www.complianceonl
Africa. ine.com/dictionary/OECD_P
LO4: Distinguish between the voluntary rinciples_of_Corporate_Gov
and compulsory mechanisms that ernance.html [Accessed 24
regulate corporate governance in May 2022].
South Africa, with particular
reference to the following: International Corporate
• Applicable legislation Governance Network “ICGN
• The common law Global Governance
• Legal precedent Principles” 2014 available at
• The application of foreign law https://www.fsa.go.jp/en/re
• The King Code IV fer/councils/corporategover
• JSE Listing requirements. nance/reference/icgn.pdf
[Accessed 26 May 2023].

© The Independent Institute of Education (Pty) Ltd 2023 Page 21 of 37

IIE Learn Module Outline GOET7312

South African Company Law

LO5: Analyse the interaction between the for the 21st Century:
Companies Act and King IV. Guidelines for Law Reform
LO6: Explain the approach taken by the GN 1183 GG 26493 of 23
King IV as well as its purpose and June 2004, available at
legal status. https://www.gov.za/docum
LO7: Evaluate the extent of legislative ents/south-african-
regulation of Corporate Governance company-law-21st-century-
in South Africa. guidelines-corporate-law-
reform-0 [Accessed 26 May
2023].

Mongalo, T “An overview of

company law reform South
Africa: From the Guidelines
to the Companies Act 2008”
2010
https://open.uct.ac.za/butst
ream/handle11427/16548/
Mongalo_An_overview_co
mpany_law_2010.pdf?sequ
ence=1 [Accessed 26 May
2023].

JSE Ltd Listing

Requirements available at
https://www.jse.co.za/regul
ation/companies-issuer-
regulation/listing-
requirements/listing-jse
[Accessed 26 May 2023].
(Please note: For
assessment purposes,
students are only required
to study those sections of
the document as referred to
in the prescribed textbook
and sections 4.8, 4.9 & 4.10)

“JSE amends listing

requirements to cut red

© The Independent Institute of Education (Pty) Ltd 2023 Page 22 of 37

IIE Learn Module Outline GOET7312

tape and create an enabling

environment”.
https://www.jse.co.za/news
/news/jse-amends-listings-
requirements-cut-red-tape-
and-create-enabling-
environment
[Accessed 26 May 2023].

Sections 5 & 7 of the

Companies Act, 2008.

IODSA King IV Report on

Corporate Governance for
South Africa available at
https://www.saica.co.za/Te
chnical/LegalandGovernanc
e/King/tabid/2938/language
/en-ZA/Default.aspx
[Accessed 26 May 2023].
Theme 2: The Companies Act and legal
personality
LO9: Discuss the concept of legal PM: Chapter 4 [4.1 and 4.9]
personality. and Chapter 9 [9.15] only
LO10: Explain the consequences of
separate legal personality and Arden, D Piercing the
when it will be disregarded. corporate veil -old
LO11: Elaborate on the concept of metaphor, modern
personal guarantees by directors practice? 2017 (1) JCCL& P
and shareholders. 1 (available on the student
LO12: Explain the consequences of non- portal).
compliance with the Companies
Act. Airport Cold Storage (Pty)
Ltd v Ebrahim 2008 (2) SA
303 (C).

Cape Pacific Ltd v Lubner

Controlling Investments
(Pty) Ltd 1995 (4) SA 790
(A).

© The Independent Institute of Education (Pty) Ltd 2023 Page 23 of 37

IIE Learn Module Outline GOET7312

Hulse-Reutter v Godde 2001

(4) SA 1336 (SCA).

© The Independent Institute of Education (Pty) Ltd 2023 Page 24 of 37

IIE Learn Module Outline GOET7312

Learning Unit 3 Stakeholders in Corporate Governance

Overview:

Traditionally, the primary objective of the governing body was to enhance shareholder value
and maximise shareholder wealth. However, the King IV Report on Corporate Governance
advocates for a stakeholder-inclusive approach to corporate governance. This means that
the governing body of the company should account for and balance the legitimate and
reasonable needs, interests and expectations of all company stakeholders when exercising
its functions. These stakeholders include not only the shareholders in a company but
creditors, suppliers, consumers, employees, local communities, society, and the surrounding
environment.

In this learning unit we look at the role of shareholders in a company, examine the function
of the governing body and the duties and liabilities of individual directors and company
officers.

Familiarise yourself with voting rights and the different percentages that are required for
different types of resolutions.

Please work through Themes 1, 2, and 3 on Learn, together with the relevant sections of
your prescribed source/s. To ensure that you are working towards mastering the objectives
for this learning unit, please also ensure that you complete all activities on Learn.

© The Independent Institute of Education (Pty) Ltd 2023 Page 25 of 37

IIE Learn Module Outline GOET7312

Sessions: Theme 1: The role of shareholders Prescribed Material (PM)

13-18
LO1: Explain the role of shareholders in PM: Chapter 6
governance.
LO2: Explain how the balance between The Companies Act, 2008:
power and accountability is • Section 20 (9)
achieved between the board of • Section 218 (2)
directors and shareholders.
LO3: Advise on all aspects of IODSA King IV Report on
shareholder’s meeting. Corporate Governance for
LO4: Distinguish between shareholders South Africa available at
meetings and the Annual General https://www.saica.co.za/Te
Meeting (AGM). chnical/LegalandGovernanc
LO5: Differentiate between the two types e/King/tabid/2938/language
of shareholder resolutions and /en-ZA/Default.aspx
apply to a set of facts. [Accessed 26 May 2023].
LO6: Fully explain the derivative action
with reference to the appraisal Esser, I & Delport, P The
rights of dissenting shareholders. protection of stakeholders:
L07: Elaborate on how the King IV code The South African social and
approaches the recognition of ethics committee and the
stakeholder interests, including that United Kingdom’s
of shareholders. enlightened shareholder
LO8: Critically discuss the concept of value approach: Part 1 De
shareholder activism and Jure (2017) 97-110.
differentiate between the two
schools of thought.
LO9: Advise on the role of institutional
investors and the best practice
guidelines in relation to shareholder
conduct.
Related Theme 2: The governing body PM: Chapters 5 [5.4], 7 [7.2;
Outcomes: 73; 7.4;7.6 7.8 ]and 8 [8.3 ;
MO001 LO10: Distinguish between a unitary and 8.7 and 8.10
MO004 two-tiered board structure.
LO11: Critically discuss the role and Garratt, B The Fish Rots
functions of the governing body from the Head: The Crisis in
(board of directors) Our Boardrooms:
LO12: With reference to a set of facts, Developing the Crucial Skills
advise on the formalities and of the Competent Director
(2003) 109-136 & 146-152 –

© The Independent Institute of Education (Pty) Ltd 2023 Page 26 of 37

IIE Learn Module Outline GOET7312

procedures related to board fully available on Ebscohost

meetings. through the IIE Library
LO12: Advise on all concepts relating to Website.
the composition of the governing Cassim, M South African
body/ board of directors with Airways makes emergency
specific reference to the roles, landing into business
duties and responsibilities of rescue: some burning issues
various types of directors. 2020 SALJ (137) 201-214.
LO13: Analyse how the independence of
the board may be ascertained. SAICA Mandatory Audit
LO13: With reference to a set of facts, Firm Rotation (MAFR) (and
analyse the ways in which the other related measures) as
governing body/board of directors Possible Means of
can be regulated to create a Enhancing Auditor
competitive advantage for the Independence 2017
organisation. discussion paper available
LO14: Critically discuss the concept of a at
dysfunctional board. http://www.saica.co.za/Port
LO15: Critically discuss how the right als/0/documents/MAFRDisc
boardroom culture can be created. ussionPaper.pdf?ReferenceI
LO16: Explain the purpose, role, and D=45018384 [Accessed 26
requirements of the various board May 2023].
committees with reference to
legislation and King Code
recommendations.
LO17: Analyse how the performance of a
governing body/board of directors
may be measured.
Theme 3: The individual director and PM: Chapter 9 [9.3; 9.4;
company officers 9.6;9.7; 9.10], 10 [10.1;1.03;
LO18: Explain the concept of a fiduciary 10.5-6] and 11[11.2;11.4]
duty held by directors and other
company officers. IODSA Director’s duties and
LO19: Appraise the extent to which liability 2017 media
inherent powers are conferred on statement available at
directors. https://www.iodsa.co.za/ne
LO20: Discuss the common law duties of ws/378187/Directors-
directors. duties-and-liability.htm
LO21: With reference to a set of facts, [Accessed 26 May 2023].
explain the liability of directors for
breach of duties as well as The Companies Act, 2008:

© The Independent Institute of Education (Pty) Ltd 2023 Page 27 of 37

IIE Learn Module Outline GOET7312

indemnity afforded to directors, • Section 76 (3) & (4)

with an emphasis on the business • Section 77
judgement rule. • Sections 161-165
LO22: Discuss in detail other liabilities of • Section 218 (2).
the director in relation to the Act.
LO23: Set out the roles of the following South African Broadcasting
company officers: Corporation Ltd v Mpofu
• The CEO and another [2009] 4 All SA
• The company secretary 169 (GSJ)
• Prescribed officers; and
• External auditors. Levenstein v the State
LO24: Apply the specific requirements as [2013] 4 All SA 528 (SCA).
per the JSE Listings Requirements
forlisted companies with reference S v Brown [2015] All SA 452
to conditions for listing: (SCA).
• Appointment of directors
• Officers of the company Section 4.8, 4.9 & 4.10 of
• Directors’ declaration JSE Listing requirements.
LO25: Evaluate the importance of the
remuneration report.
LO26: Critically analyse executive
remuneration with an emphasis on
the ethical considerations that
companies should consider
surrounding the wage gap.
LO27: Advise on the approach that
should be taken by directors in
responding to crisis.

© The Independent Institute of Education (Pty) Ltd 2023 Page 28 of 37

IIE Learn Module Outline GOET7312

Learning Unit 4 Risk and Reporting

Overview:

Good corporate governance requires companies to effectively report on the affairs of the
company and disclose all material information that affects it. This is to enable stakeholders
to continuously monitor and evaluate their interests in a company. As such, companies are
required to publish certain reports in terms of the Companies Act 71 of 2008 and the JSE
Listing Requirements, while King IV also establishes principles and provides
recommendations on reporting requirements.

In this learning unit, we will look at the concept of transparency and reporting as it pertains
to corporate governance practices and risk management.

Please work through Themes 1 to 3 on Learn, together with the relevant sections of your
prescribed source/s. To ensure that you are working towards mastering the objectives for
this learning unit, please also ensure that you complete all activities on Learn.

© The Independent Institute of Education (Pty) Ltd 2023 Page 29 of 37

IIE Learn Module Outline GOET7312

Learning Unit 4: Risk and Reporting

Sessions: Theme 1: Transparency and Reporting Prescribed Material (PM)
19-24
Related LO1: Illustrate the concept of PM: Chapter 12
Outcomes: transparency as it pertains to
MO001 corporate governance and what this
MO002 entails.
MO004 LO2: Explain the importance of
transparency as part of the ways in
which companies should effectively
manage communication.
LO3: Analyse the purpose of an
integrated report and how this
should reflect the concept of
integrated thinking.
LO4: Elaborate on the statutory reporting
and record keeping requirements of
a company, with specific reference
to the following:
• Annual financial statements
• Director’s report
• Integrated report
• Access to financial statements
• Annual returns; and
• Reporting by Public
companies.
LO5: Explain the importance of
sustainability reporting in the
transparent disclosure of company
information.
LO6: Indicate how the protection of
whistle-blowers as a measure to
ensure transparency is enforced
through legislation.

© The Independent Institute of Education (Pty) Ltd 2023 Page 30 of 37

IIE Learn Module Outline GOET7312

Theme 2: The Governance of Risk PM: Chapter 13

LO7: Describe the concept of risk
governance.
LO8: Describe the main categories of
risk.
LO9: Explain the importance of risk
management.
LO10: Apply the steps for implementing a
risk governance plan to a set of
facts.
LO11: Explain the concepts of combined
assurance and internal control.
LO12: Explain what technology and
information governance entails.

© The Independent Institute of Education (Pty) Ltd 2023 Page 31 of 37

IIE Learn Module Outline GOET7312

Learning Unit 5 The Governance of listed and State-owned companies

Overview:

The underlying principles of good corporate governance extend to state-owned entities

(SOEs) as well as listed companies. South Africa’s SOEs play a critical role in the country’s
finances, as their successes or failures heavily impact the South African economy. However,
in recent years many SOEs have become synonymous with corrupt activities and have been
marred by exceptionally poor governance that have led to financial ruin.

Additionally, SOEs also impact the success of companies listed on the JSE which is governed
by the JSE Listing Requirements, in addition to legislation and other regulations and codes of
practice.

In this learning unit, we will specifically look at the governance of state-owned entities and
listed companies in South Africa.

Please work through Themes 1 and 2 on Learn, together with the relevant sections of your
prescribed source/s. To ensure that you are working towards mastering the objectives for
this learning unit, please also ensure that you complete all activities on Learn.

© The Independent Institute of Education (Pty) Ltd 2023 Page 32 of 37

IIE Learn Module Outline GOET7312

Learning Unit 5: The Governance of listed and State-owned companies

Sessions: Theme 1: The Governance of listed Prescribed Material (PM)
25-30 companies
Related LO1: In layman’s terms, summarise the PM: Chapter 14 [14.2 -14.5]
Outcomes: general principles of the JSE Listing
MO001 Requirements. JSE Ltd Listing
MO002 LO2: Explain the legislative powers and Requirements available at
MO004 authority of the JSE and what they https://www.jse.co.za/regul
entail. ation/companies-issuer-
LO3: Apply the general requirements for regulation/listing-
listed companies. requirements/listing-jse
LO4: Set out the continuing obligations of [Accessed 26 May 2023].
listed companies and what they
entail.
Theme 2: The Governance of SOEs PM: Chapter 15 [ 15.2-15.4
and 15.6]
LO5: Explain the factors that have been
said to contribute towards Thabane, T &Snyman van
underperformance of SOEs in South Deventer, E Pathological
Africa. Corporate Governance
LO6: Fully discuss the legal framework Deficiencies in South African
within which SOEs are governed. State-Owned Companies: A
LO7: Discuss the roles and duties of Critical Reflection 2018 PELJ
different categories of Directors of (21) 2.
SOEs with particular reference to:
• Their appointment and Cheteni, P & Khamfula, Y
remuneration State Owned Enterprises in
• Fiduciary duties South Africa: A Pinnocchio
• Liability and independence. Paradox (1 January 2018)
LO8: Assess the role of boards of SOEs. AfriGrowth Agenda
LO9: Appraise the obligations placed on available at https://journals-
SOEs by the Public Finance co-
Management Act with reference to za.eproxy.iielearn.ac.za/acti
a set of facts. on/doSearch?AllField=South
+African+Airways&pageSize
=20&startPage=1 [Accessed
26 May 2023].

PwC South Africa State -

owned companies: The new
Companies Act, PFMA, and

© The Independent Institute of Education (Pty) Ltd 2023 Page 33 of 37

IIE Learn Module Outline GOET7312

King III in perspective 2021

available at
http://www.pwc.co.za/com
panies-act [Accessed 26
May 2023].

© The Independent Institute of Education (Pty) Ltd 2023 Page 34 of 37

IIE Learn Module Outline GOET7312

Learning Unit 6 CSR, sustainability, and corporate citizenship

Overview:

Corporate Social Responsibility (or CSR) in South Africa was initially called corporate social
investment in education, health, or welfare. The focus of companies was to promote the
interests of the shareholders of the company, by boosting the profits that were made.

However, since the Constitution came into effect and other legislation was subsequently
passed, the CSR obligations of companies have evolved. In recent years, companies have
given increased attention to the concepts of corporate citizenship and sustainability as they
have come to realise that they have a social justice, cultural and environmental
responsibilities to the communities in which they seek to operate, on top of the economic
and financial responsibilities they have towards their shareholders or immediate
stakeholders. Compliance with these laws is now an ethical obligation of companies.

In this learning unit, we will look at the concepts of corporate citizenship, responsibility and
sustainability and discuss the importance of ethical leadership in South African companies.

Please work through Themes 1 and 2 on Learn, together with the relevant sections of your
prescribed source/s. To ensure that you are working towards mastering the objectives for
this learning unit, please also ensure that you complete all activities on Learn.

© The Independent Institute of Education (Pty) Ltd 2023 Page 35 of 37

IIE Learn Module Outline GOET7312

Sessions: Theme 1: Corporate citizenship, Prescribed Material (PM)

31-36 responsibility, and sustainability
LO1: Explain the concept of corporate PM: Chapter 16 and chapter
citizenship with specific reference 18
to:
• Corporate social responsibility Kloppers, H Driving
(CSR) and corporate social corporate social
investment (CSI); responsibility (CSR) through
• The impact of companies on the Companies Act: An
society; and overview of the role of the
• How the profit motive of a social and ethics committee
company is married with 2013 PER (16) 1.
corporate citizenship.
LO2: Distinguish between the types of Polity Corporate Social
corporate social responsibility. Responsibility in South
LO3: Apply the key principles of Africa: More than a nice
responsible companies and what intention 2011 website
they entail. available at
LO4: Critically discuss how the CSR https://www.polity.org.za/a
obligations of companies in South rticle/corporate-social-
Africa are regulated. responsibility-in-south-
LO5: Apply the concept of corporate africa-more-than-a-nice-
sustainability to a set of facts. intention-2011-09-12
LO6: Analyse the importance of the [Accessed 26 May 2022].
following in sustainability reporting:
• Identifying the company’s
stakeholders.
• Risk, reputation, and
sustainability.
LO7: Analyse the importance of
sustainability in the concept of the
triple bottom line.
LO8: Assess how environmental
responsibility of companies is
regulated in South Africa.
LO9: Evaluate the business reasons for
companies to implement sustainable
business practices in terms of the
concept of the triple bottom line.

© The Independent Institute of Education (Pty) Ltd 2023 Page 36 of 37

IIE Learn Module Outline GOET7312

LO10: Explain how a company could try and

achieve the right balance of
substance over form when it comes
to implementing effective corporate
governance measures.
LO11: Describe how a culture of
compliance could be created.
LO12: Explain how the board should
approach the implementation of a
Corporate Governance Framework.
LO13: Apply the elements of good
governance to a set of facts and
advise how they may be
implemented.

© The Independent Institute of Education (Pty) Ltd 2023 Page 37 of 37