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PRESCRIBED OFFICER

A prescribed officer is anyone who fulfils the role of a director but who is operating
(intentionally or otherwise) under a different designation. He is therefore typically an
executive who is in a position to influence the management of the company or one of its
significant divisions, and who regularly participates to a material degree in the exercise
of general effective control over and management of the whole or a significant portion of
the business and activities of the company.
A company secretary, may, for example, fall within the definition of a prescribed officer in
terms of the Act, even although he may not be a director appointed to the board of the
company.
Prescribed officers are bound by the same codified duties and liabilities of directors
which are referred to in numerous sections of the Act.
It is very important that the board is able to identify who the prescribed officers are.
Equally important is that the prescribed officers know who they are, and that they
understand their responsibilities in terms of the Act. Not doing so puts both the board
and the prescribed officer at risk of non-compliance with the Act, which in turn could
lead to activities that may result in personal liability.

APPOINTMENT AND ELECTION OF DIRECTORS

Section 66(2): The board must comprise:
■ In the case of a private or personal liability company: at least one director, or
■ In the case of a public company or a non-profit company: at least three directors –
in addition to the minimum number of directors that the company must have to satisfy
any requirement, whether in terms of the Act or its MOI, to appoint an audit committee,
or a social and ethics committee. The MOI may provide for a higher number in
substitution for the minimum number of directors than those required by the Act.
Section 66(4)(a) provides that the MOI may:
■ Provide for the direct appointment and removal of one or more directors, by any
person named who is named in, or determined in terms of, the MOI, and
■ May also provide for a person to be an ex officio director as a consequence of that
person holding some other office, title, designation or similar status (subject to him
being eligible and qualified to do so in terms of Section 69)
■ The appointment or election of alternate director(s) to the company.
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