The Companies Amendment Acts have reshaped South Africa’s corporate law landscape, and several of those reforms reach well beyond the boardroom into the workplace. Two developments stand out for employers. First, a new pay-disclosure regime turns a public spotlight on income inequality and compels transparency around remuneration in ways many companies have never had to manage before. These obligations are now in force. Second, the Second Amendment Act has widened the window in which directors and, in certain cases, prescribed officers, can be held to account through delinquency orders and civil damages claims.

Those accountability reforms took effect in December 2024 and operate retrospectively. By relaxing and extending the relevant time bars, the legislation gives companies, shareholders and other stakeholders a longer runway to investigate suspected wrongdoing, gather evidence and launch proceedings, entirely separate from any internal disciplinary action a company might take to remove a director from office. Put plainly: directors who once escaped consequences because the clock had run out now carry legal exposure for far longer. We unpack each of these changes, and their practical impact on employers and employees, below.

New remuneration disclosure obligations: sections 30A and 30B

Sections 30A and 30B are now operative, though regulations are still expected to fill in certain details of the remuneration policy and remuneration report. (For our earlier deep-dive on these provisions, see our previous alert [link].) In summary:

Section 30A — the remuneration policy

Every public and state-owned company must prepare a forward-looking remuneration policy for shareholder approval at an annual general meeting (AGM), and then again every three years or whenever the policy changes materially. If a vote on the policy fails, the consequences are unclear beyond the requirement to resubmit the policy for approval at the following AGM. Where a previous policy was approved, it will presumably remain in force until shareholders sign off on a replacement.

Section 30B — the remuneration report

Every public and state-owned company must also produce an annual remuneration report covering the previous financial year, to be approved by shareholders at each AGM. That report must contain both the remuneration policy and an implementation report. Among other things, the implementation report must disclose:

• the total remuneration paid to each director and prescribed officer;
• the total remuneration of the highest-paid employee;
• the total remuneration of the lowest-paid employee;
• the median remuneration across all employees; and
• the pay gap expressed as the ratio between the total remuneration of the top 5% of earners and that of the bottom 5%.

For section 30B purposes, “employee” carries the meaning given in section 213 of the Labour Relations Act, 1995 (LRA). That captures any person, other than an independent contractor, who works for another person or for the state and receives, or is entitled to, remuneration, as well as anyone who in any capacity helps to carry on or conduct the employer’s business.

The figures cannot be cherry-picked from base salary alone. “Total remuneration,” as defined in the First Amendment Act, sweeps in all salary and benefits, employer contributions to benefit funds, and both short- and long-term incentives such as share options and incentive awards. Every calculation underpinning the implementation report must therefore reflect the full package.

The “two-strike” rule

The implementation report carries real teeth in the form of a two-strike mechanism:

• Strike one: if shareholders vote down the implementation report at an AGM, the non-executive directors who sit on the company’s remuneration committee must stand for re-election to that committee at the next AGM.
• Strike two: if the following report is also rejected, those non-executive committee members are deemed to step down from the board at that AGM. They may stand for re-election to the board, but they are barred from serving on the remuneration committee for two years.

There is a carve-out: the restriction does not bite on remuneration committee members who served on the committee for less than 12 months during the financial year under review. For listed entities, this is a meaningful shift in how accountability and governance are enforced.

Policy versus report: drawing the line strategically

Because the policy needs shareholder approval only every three years (or on a material change) while the report is approved annually, companies should think carefully about what goes where. The smarter approach is usually to keep the remuneration policy at the level of principle, the company’s overarching philosophy and governance approach to pay and to reserve the granular, year-to-year detail for the implementation report, which can be adjusted annually without forcing a fresh policy vote inside the three-year cycle. Annual approval of the report sharpens shareholder oversight, which in turn raises the premium on engaging shareholders proactively on remuneration strategy ahead of meetings.

Turning compliance into opportunity

Many companies will find the new disclosures demanding, but they also create room to sharpen remuneration frameworks. Public companies should be aligning their policies and reports with the statutory framework, running pay-gap assessments before they report, and engaging shareholders on the new regime well before AGM season. Done properly, this lets a company define its pay structures clearly, set principles for salary reviews and improve transparency, particularly around executive pay. Stronger governance here brings greater transparency, predictability and accountability, and a considered pay strategy can address disparities while keeping compensation aligned to skill, expertise and seniority. It also protects financial sustainability and signals a genuine commitment to fair pay, which tends to pay dividends in employee trust, engagement and retention.

A longer leash to hold errant directors to account

Where a director or prescribed officer, broadly, an executive who exercises, or materially participates in, general executive control over the company or a significant part of its business, whether or not they sit on the board, breaches their fiduciary duties, the company has a claim against them for the resulting loss, damages or costs. This applies to every company.

These claims fall outside the Prescription Act 68 of 1969. Previously a hard time bar applied: the company had to bring its claim within three years of the relevant act or omission. That cut-off was poorly suited to reality, because fiduciary breaches are so often uncovered long after the event.

Section 77(7) of the Companies Act was amended in December 2024 to address exactly this. A company may now apply to court to extend the three-year period on good cause shown and because the amendment is retrospective, a court can grant that extension even where the breach predates the change.

Section 162 has shifted in the same direction. Certain parties, including the company itself and its shareholders, can apply to court to declare a person delinquent on specified grounds. for instance, gross abuse of a directorship. The applicant previously had to show that the person was a director within the two years immediately before the application. The Second Amendment Act extends that lookback period to five years, with a court able to extend it further on good cause shown. This change, too, is retrospective.

One important boundary applies. These relaxed time bars reach only claims under the Companies Act, that is, claims for breach of fiduciary duty and of the duty of care, skill and diligence. They do not touch claims that arise purely in a contractual or employment-law context, which remain governed by the ordinary rules of prescription.

Where employees stand in business rescue

Under section 135(1) of the Companies Act, when a company is in business rescue and amounts owing to employees, remuneration included, go unpaid, those amounts are treated as post-commencement finance and are settled according to the order of preference in section 135(3)(a).

Employees rank near the top of that queue. The only claims ahead of them are the business rescue practitioner’s fees and expenses and the costs of the business rescue proceedings themselves. The December 2024 amendments improved a landlord’s position for unpaid utilities consumed by a tenant during business rescue: those utility claims now rank above pre-commencement claims, but still below employee claims. The net effect for employees is therefore unchanged, their priority remains intact. This applies to all companies.

The social and ethics committee gains weight

The social and ethics committee, introduced by the Companies Act in 2011, remains one of the clearest statutory recognitions of employees’ rights and interests at board level. The committee monitors and reports on a range of matters, including the company’s compliance with binding and non-binding labour law and employment equity codes.

The committee’s core role and functioning are untouched by the Amendment Acts, but two procedural changes matter for public and state-owned companies: their social and ethics committees must now be elected by shareholders rather than appointed by the board, and they must be composed of a majority of non-executive directors.

Whether this genuinely strengthens the protection of employees’ interests is debatable. In practical terms, the change simply moves the decision over who monitors the company’s sustainability and corporate-citizenship activities from the board to the shareholders.

What employers and boards should do now

The Amendment Acts deliver significant change across the corporate regulatory landscape, including areas that sit squarely at the intersection of company law and the workplace.

With the remuneration disclosure rules already in force, companies need a measured, well-structured compliance approach that satisfies both shareholders and employees. More urgently, boards should revisit their disciplinary and investigation procedures, especially as they apply to directors and prescribed officers, so that internal processes line up with the longer period in which directors can now be held accountable for fiduciary failures, and so that the company is positioned to use that extended window effectively when assessing the nature and extent of any breach.

This article is provided for general information and does not constitute legal advice. For guidance on how the Companies Amendment Acts affect your organisation, please contact our Corporate & Commercial / Employment team.