Date: 17 June 2025
Being a director of a company comes with more than just prestige — it carries serious legal, ethical, and fiduciary responsibilities. Whether you’re a first-time director or a seasoned executive, understanding your duties under the Companies Act and latest CIPC guidance is crucial.
At RTA, we help business owners and directors navigate these obligations with confidence and clarity.
What Does It Mean to Be a Director?
A director is legally responsible for the governance, strategy, compliance, and performance of a company. In South Africa, directors are not only accountable to shareholders, but also to employees, creditors, regulators, and the broader public.
The Companies and Intellectual Property Commission (CIPC) recently issued Guideline 1 of 2025, reaffirming and expanding expectations of directors.
Key Duties of Directors
According to Section 76 of the Companies Act and recent CIPC interpretations, directors must:
- Act in Good Faith and for a Proper Purpose – Decisions must benefit the company — not personal interests.
- Act in the Best Interests of the Company – Directors must prioritise the company’s sustainability, not individual gain.
- Exercise Care, Skill and Diligence – Directors are expected to stay informed and apply sound judgment.
- Avoid Conflicts of Interest – Any personal financial interests must be disclosed and managed transparently.
- Adhere to the Companies Act and MOI – Directors must comply with the company’s Memorandum of Incorporation, shareholder agreements, and all applicable legislation.
New Emphasis by CIPC (2025)
The 2025 guideline reinforces that directors can no longer plead ignorance. Directors must:
- Proactively engage in governance processes
- Understand the financial state of the company
- Oversee compliance with tax, labour, and financial legislation
- Ensure proper recordkeeping and disclosure
Failure to do so may result in personal liability, disqualification, or regulatory action — especially in cases of reckless trading or gross negligence.
Risks of Non-Compliance
If directors neglect their duties, the consequences can be severe:
- Civil claims from the company, shareholders, or creditors
- Criminal penalties for willful misconduct or fraud
- Personal financial liability for company debts in certain cases
- Disqualification from acting as a director of any company
How RTA Helps You Stay Compliant
RTA partners with directors and companies to help you meet your governance obligations. Our services include:
- Monthly or quarterly management packs with financial insights
- Risk, compliance, and tax oversight
- CIPC record maintenance and directorship compliance checks
Governance Is Not a Tick-Box — It’s a Legal Duty
Good governance protects your company, your reputation, and your personal assets. Don’t wait for SARS, the CIPC, or creditors to knock before you act.
Let RTA be your strategic advisor in boardroom compliance.
Contact us today if you’re a director and unsure of your current responsibilities or exposure.
