RegulationSouth Africa

The JSE requires a board policy on race as well as gender diversity

Listings Requirement 3.84 obliges a listed board to adopt policies on the promotion of both race and gender diversity, set voluntary targets, and report annually against them.

1 January 2023

South African listed boards must adopt and report against policies on both race and gender diversity. That is broader than the gender-only regimes in most European markets, and it is reinforced commercially: B-BBEE codes score board composition within the management-control element, so board diversity carries a direct consequence for the company's scorecard.

King IV governs board composition through Principle 7 on an apply-and-explain basis, requiring the board to explain the practices it has adopted and the outcomes achieved rather than to tick provisions. Independence must be assessed substantively each year, with a rigorous review beyond nine years' service.

Companies Act s.72(4) and Regulation 43 require a Social and Ethics Committee at listed, state-owned and larger companies, with a statutory mandate reported to the annual general meeting.

What it means for a cross-border candidate

A foreign candidate should expect a South African board to discuss the transformation consequences of the appointment openly, because the board is scored on them. That is not a reason to stay away — it is a reason to arrive with a clear answer about what you add that the domestic pool does not, and about how you will build capability behind you.

This paragraph is the Global ID Exchange’s own reading, not a statement by any authority named above. Everything in the body of this item is a matter of record; this is judgement.

Sources

  • JSE Listings Requirements, s.3.84
  • King IV Report on Corporate Governance for South Africa 2016, Principle 7
  • Companies Act 71 of 2008, s.72(4) and Regulation 43

Rules change and transitional provisions frequently apply. Verify against the primary instrument before you rely on any provision described here.

Read next: the South African regime in full.

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