Compliance by company boards and management, particularly in the case of complex companies with cross-border activities, requires monitoring by an entire ecosystem.
Following a corporate failure the usual questions are asked: What went wrong? Who was at fault? More often than not a finger is pointed at the auditors. Is that fair? Sometimes the attribution of responsibility to the auditors is correct. On other occasions, one or more of the other role-players in the total compliance ecosystem must bear the blame. The purpose of this article is to identify all of the role-players in the compliance ecosystem, to specify each of their responsibilities in preventing corporate failures, the consequences of which are devastating to the market, investors, employees and creditors. It is important to appreciate factors which companies operate against- complexity, cross-border activities, regulators, new technology and a multiplicity of stakeholders.
More often than not, after a catastrophic corporate failure, questions are raised about the adequacy of the law. South African company law, in respect of its substance, procedures and remedies, ranks among the best in the world. Laws and regulations that regulate companies and their officers, such as the Banks Act and Financial Markets Act, are also...