The personal liability of directors for corporate fault - an exploration

The increased focus on good corporate governance has led to a renewed interest in the duties of company directors. The gradual extension of directors' responsibilities and the serious consequences of breach of these duties are often alluded to in general terms. However, there has not been a systematic study of the nature and scope of directors' personal liability for corporate conduct. In Australia, the Corporations and Markets Advisory Committee (CAMAC) conducted an enquiry into the personal liability of directors for corporate fault under both federal and state legislation. The report revealed a lack of coherence between the requirements and justifications for different instances of derivative liability imposed and directors. The purpose of this article is to explore the different areas and bases of liability applicable to company directors in South Africa.