Assignment Task
Board Composition
You are the General Secretary of the South African Hipsters Union (SAHU), a registered union which covers all ‘funky’ and ‘hipster’ business operations in South Africa. The majority of the employees employed at the Coffee Company Ltd (the company) are members of SAHU. While SAHU enjoys all the organisational rights owed to representative unions in terms of the Labour Relations Act, as well as bargaining rights at the company, you feel that more needs to be done for employees’ voices to be heard. Ideally, you would like to see employee and/or union representation on the company’s board of directors. Furthermore, you feel very strongly that, in order to encourage gender diversity, there should be mandatory quotas in place regarding the minimum number of female directors required to be on the board at any given time. When you wrote to the CEO of the Coffee Company Ltd about the possibility, she responded by saying that in the absence of legal requirements which obliged the company to make these changes to the composition of the board, and the support of the company’s shareholders, her hands were tied. You therefore decide to appeal to the Minister of Trade, Industry and Competition to try and change the law. Your task is to draft that document, providing full details of your proposal i.e. what the law should or could look like in order to give effect to these objectives. Include an explanation of how company and labour law in South Africa stands and fails at present in this regard. You must also address any relevant corporate governance principles contained in King IV. In addition, ensure that you discuss the possible advantages and disadvantages of electing employees and/or union officials to company boards in South Africa, from both the business and labour perspectives, in your brief to the Minister. You must do the same with respect to the gender diversity proposal. Support your arguments with authoritative legal sources, as well as relevant comparative materials and regulations from foreign jurisdictions which may have legislated employee board representation and board gender quotas.
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