Cosatu laud ‘progressive’ Companies Amendment Bill

The Companies Amendment Bill currently before parliament is progressive and long overdue, says the Congress of South African Trade Unions (Cosatu) and many other labour unions.

The parliamentary portfolio committee on trade, industry and competition has held public hearings on the Companies Amendment Bill, which seeks greater disclosure of remuneration practices at private companies.

Tracey Davies, executive director of Just Share, said the Bill highlighted the concerning notion that the lowest-paid workers should count themselves lucky to have a job at all.

Matthew Parks, Cosatu spokesperson and parliamentary coordinator said, apart from restoring dignity and overcoming “our shameful apartheid wage gap”, it would further help to fight corruption and money laundering.

‘Outdated legislation is why SA was greylisted’

“The fact that the beneficial ownership of companies has stayed hidden has allowed fraud and corruption to thrive,” Parks said. “The changes proposed in these Bill will shine an even brighter light on ownership and provide for greater access to company records.”

“Our outdated legislation is why South Africa, after repeated warnings, was greylisted last year.

“This has a real and painful consequence to attracting investment, stimulating the economy and creating jobs.”

He said the Bill would also improve transparency around companies’ finances and governance, bringing South Africa on par with other countries.

“This will allow workers to understand more about their employers and will strengthen and improve wage bargaining and consultation around retrenchments, as well as boost labour market stability,” he added.

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Labour consultant Tony Healy said there was no logic behind publishing executive or chief executive remuneration, because “I’ve never come to a school of thought that says publishing it helps reduce inequality”.

“It doesn’t make sense; it never made sense to me. Disclosing CEO or executive remuneration is a good idea, but I don’t think it benefits or even addresses the inequality situation,” he said.

“What it does do is enable shareholders to assess the performance of the company, or whether the remuneration that’s being paid to executives is warranted.

“Publishing is a good idea, but for different reasons.”

Busa welcome opportunity to make oral representation

Business Unity South Africa (Busa) said companies were not necessarily rejecting the Bill, “we are merely pointing out that certain amendments will have unintended consequences and have not been properly vetted with affected companies”.

“A more comprehensive consultation process needs to take place before the Bill is finalised,” Busa’s policy director Tebele Luthuli said.

Busa welcomed the opportunity to make an oral representation on the draft Companies Amendment Bill, with their contribution intended to ensure an environment conducive to continued investment and economic growth through sustainable business.

“The simplification of compliance procedures and the introduction of technology-driven processes through the draft Companies Amendment Bill will make it easier for businesses, particularly small businesses, to operate efficiently and thrive in a competitively challenging environment.”

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She said the proposed amendments would enable members of the public to access the complete annual financial statements of private companies over a certain public interest score for the preceding seven years.

“Information contained in the annual financial statements may be made available to a company’s competitors, suppliers and [could] have a negative consequence on a company’s commercial operations,” she added.

“Ready access to named director remuneration … would constitute sensitive information which may violate the privacy rights of named directors, expose confidential information to competitors and expose directors to security risks” and should be exempted.