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A comparative analysis of directors' duty of care, skill and diligence in South Africa and in Australia

du Plessis, Jean J. 2010, A comparative analysis of directors' duty of care, skill and diligence in South Africa and in Australia, Acta juridica, vol. 2010, no. 1, pp. 263-289.

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Title A comparative analysis of directors' duty of care, skill and diligence in South Africa and in Australia
Author(s) du Plessis, Jean J.
Journal name Acta juridica
Volume number 2010
Issue number 1
Start page 263
End page 289
Total pages 27
Publisher Juta & Company Ltd
Place of publication Rondebosch, South Africa
Publication date 2010
ISSN 0065-1346
1996-2088
Summary The South African and Australian law regarding directors' duty of care, ski ll and diligence were influenced considerably by English precedent of the late 1800s and early 19005. Originally both jurisdictions adopted a conservative approach towards directors' duty of care, skill and diligence. This resulted in very low standards of care, skill and diligence expected of directors. In Australia, the standards of care and diligence expected of directors changed drastically with the case of Daniels v Anderson, where objective standards were used to determine a breach of directors' duty of care and diligence, and when objective standards of care and diligence were introduced in Australian corporations legislation. In this article it is submitted that if the opportunity arose for a South African court to consider whether a director is in breach of his or her common law duty of care, skill and diligence, the form of fault that will be required will be negligence as judged against the standards of a reasonable person. This means that in actual fact objective standards of care and diligence are expected of directors in South Africa. Although section 76(3) of the South African Companies Act 71 of 2008 does not introduce purely objective standards of care, skill and diligence, the section is defended in this article. It is pointed out that encouraging emerging entrepreneurs to become directors of South African companies provides justification for keeping subjective elements as part of the test to determine whether a director was in breach of his or her statutory duty of care, skill and diligence.
Notes Reproduced with kind permission of the copyright owner
Language eng
Field of Research 180109 Corporations and Associations Law
180106 Comparative Law
HERDC Research category C1 Refereed article in a scholarly journal
HERDC collection year 2010
Copyright notice ©Juta & Company Ltd
Persistent URL http://hdl.handle.net/10536/DRO/DU:30030935

Document type: Journal Article
Collections: Faculty of Business and Law
School of Law
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