The duty of such directors to recuse themselves has its origin in the duty of a director to act in the best interests of the company
To some, our call may seem audacious — daring to question the corporate governance standards of one of SA’s biggest private banks. In fact, we are asking for no more than adherence to the Companies Act and the King IV Code on Corporate Governance.
The editorial notes that climate change is the biggest crisis facing humankind. As a result, a significant portion of policy decisions of any significance made by a major bank will have climate-related aspects and many will have climate effects as a central issue. To behave otherwise would be to make a mockery of the claim to be a socially responsible corporate citizen, a claim Standard Bank is at pains to make.
This means that, with its board as presently constituted, Standard Bank is faced with one of two problems: either the conflicted directors will recuse themselves from any decision that has any material climate aspect, in which event it will be deprived of the skills and experience of up to 40% of its board in relation to critical decisions ; or they will not recuse themselves, render resulting resolutions potentially invalid under section 75 of the Companies Act, and irreparably compromise...
The duty of conflicted directors to recuse themselves has its origin in the duty of a director to act in the best interests of the company. That duty, as embodied in section 75 of the Companies Act, is for the benefit of the general body of shareholders.
Should responsible directors not ask themselves: do shareholders value short term profit over the prospect of the many catastrophes that climate change will bring? Why not ask them? Are there members of the board who fear a shareholder directive to disclose the extent of the bank’s funding of fossil fuel projects?editorial aptly illustrates this issue in the paragraph which states that the 2019 shareholder resolutions were tabled at the behest of Sim Tshabalala, and “not due to any particular...
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