📈 SEC Stresses Accountability: Directors' Liabilities & Governance Overhaul

• Event Focus: The Securities and Exchange Commission (SEC) held a special session on "Directors' Liabilities" for over 150 directors of listed companies, emphasizing that the strength of the Capital Market lies in the "integrity of Boards." • Legal Risk: Under the Companies Act, directors face an extensive spectrum of legal exposure, including 37 civil and 131 criminal liabilities. The Solvency Test (Sec 57) was highlighted as the "golden thread" of corporate law. • Core Duties: Directors must act in good faith and the best interest of the company (Sec 187), exercise prudence/diligence, and be intimately familiar with their company's Articles of Association. • Compliance & Oversight: • Effective delegation is crucial for compliance, but implementation must be robust. • Boards must monitor early warning signs of financial distress (e.g., delayed financials, frequent restatements). Mandatory delisting results in a 3-year loss of 'fit and propriety' status. • Reliance on management information is compromised by late or ambiguous Board papers. • New Regulation: Listed companies face a strict obligation to disclose ultimate beneficial owner information to the Registrar of Companies via the CSE within 30 days of the new Companies Act No. 12 of 2025 coming into operation.