Page 57 - FOL2023

Parneterships

A Note from Judge Selemeng Mokose

(Gauteng High Court, Pretoria Division)

Corporate governance is a system that aims to instil policies and rules that assist in maintaining the cohesion
of an organisation. This system exists to help hold a company accountable while helping it to steer clear of
financial, legal, and ethical pitfalls. By corporate governance, one not only refers to the legal constraints
but also to the norms of “best practice”. Corporate governance epitomises the principles of responsibility,
accountability, fairness, and transparency. Whether courts can change corporate behaviour must be viewed
against the backdrop of the corporate governance environment in a particular country at a particular time.
The courts get involved in enforcing corporate governance laws mainly through the interpretation of those
laws and through their application of the common law where the relevant legislation does not exist. Employing
good corporate governance assists a company in regulating risk and reducing the opportunity for corruption.
Scandals and fraud within a company are more likely to occur where directors and senior management do not
comply with a formal corporate governance code.
The judiciary has several major responsibilities in terms of corporate governance, and these include:

(i) Interpretation of the laws;
(ii) Settling legal disputes;
(iii) Determining guilt or innocence of those accused of the commission of offences and punishing
offenders accordingly;
(iv) Hearing civil cases; and
(v) Protecting the rights granted under the Constitution.

The judicial system in any country has an important role to play in ensuring better corporate governance.
There may be many laws and regulations, rules, and procedures but ultimately, the disputes must be settled
in our courts.

Issue 2022 FOL Quarterly 59