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The impact of the Companies Amendment Bill

The Companies Amendment Bill has raised many questions in the South Africa market as its passing becomes  increasingly imminent. The proposed changes and amendments of The Bill will have a significant impact on remuneration reporting and remuneration (reward) governance for many firms, both public and private. As a result reward and governance professionals will have a greater burden in terms of having the required tools, data and processes to satisfy both the reporting and governance requirements.


Deloitte perspective

What is the purpose of the Bill?

The bill is created with three objectives in mind:

  • To facilitate the ease of doing business
  • To combat money laundering
  • To achieve Pay Equity.

When will the Bill come into effect?

The passing of the Bill is imminent. It is currently awaiting the president’s signature to be passed into law after the conclusion of the consultation process.

To whom does the Bill apply?

The Bill applies to public and state-owned entities.

When do the applicable companies need to implement the requirements as per the Bill?

The implementation of the Bill by companies will happen overtime, in alignment with when the next fiscal year is for each company, mostly likely from 1 Jan 2025.

How does one reconcile the Bill and other governance rules and legislation such as King IV and JSE listing requirements?

The Bill will be passed into law to set the minimum standards of remuneration reporting and governance. Unlike the alignment of the JSE Listings Requirement with King IV, there has been no known alignment between the Bill and other governance rules and laws. The JSE Listing Requirements often have a higher standard than the Companies Act which means there would be a ‘hybrid’ approach for complying with both.

Are regulations going to be introduced to provide further clarity on some grey areas in the Bill?

No known guidelines are in the pipeline as of now. However, this would be critical to address grey areas such as:

  • The definition of an ‘employee’
  • The definition of ‘benefits’ in relation to the ‘Total Remuneration’ reporting requirement in the Bill
  • How the bill relates to other governance laws and rules.

Are there any pitfalls reward and governance professionals need to be aware of?

  • Potential abuse of two-strike rule: By voting against policies/reports, Board members could be removed from their seats without merit or for other non-related reasons.
  • Potential cost of two-strike rule: Potential Board spill as a result of the rule means incurring costs of replacements can have a negative effect on the company’s share price.
  • Disclosure requirements: Clarity around whether Board members need to declare their removal in the event of an unfavourable vote.
  • Insurance: Risk of Board spill means Board members will want the safety of good insurance to cover the risk of removal and other potential risks..


Globally, many countries and regions are trending towards greater pay transparency. The need for increased pay transparency is to address pay inequity and ensure a fair and better alignment between pay and performance, which is caused by several historical and socio-economic factors. A significant development in the global market recently was the implementation of The EU Pay Transparency Directive (The Directive) which came into force in June 2023 for all member states. The Directive sets out pay transparency requirements such as disclosing the gender pay gap and the pay ratio between the highest paid individual’s salary and the average total compensation.

From a governance viewpoint, shareholder oversight and rights are also brought into focus. The “two-strike” rule will be introduced by The Bill, which can have a few unintended consequences. The rule can be open to abuse or cause the business (shareholders) to incur costs as seen in some cases in Australia where the “two-strike” rule applies. The costs of replacing a Board and the change in committee members can have a negative impact on a company’s share price. Drawing on further global similarities, The Bill states that any report that is not passed by a majority vote, will need to be presented and voted for at the next AGM.


What are the implications?

“What does this mean for me?”- the answer to this question depends on your role. The Bill’s proposed changes and amendments will have practical implications, particularly for Remuneration Committee Chairs and Members, Remuneration Teams and Company Secretaries.

  • Higher risk of being part of the RemCo
  • Finite skills base
  • Assuming NEDs having to stand down
  • Likely to increase Board fees
  • Understanding global trends and best practice will be critical
  • Increased engagement and quality of reporting will be critical
  • In-depth knowledge of remuneration required
  • The importance of a well thought out remuneration report that effectively conveys a company’s stance will be increasingly important
  • Ability to engage with shareholders and link reward to strategy
  • Training/upskilling will be important.
  • Further enhances the importance of remuneration as a lever within the firm and a centre of excellence.
  • Communication and education around reward will be critical
  • Higher burden of reporting (systems)
  • Ensure your firm has the right pay scales, benchmarks and insights to make informed decisions
  • Importance of data and insights critical in informing key stakeholders
  • Implement and monitor strategies to correct any pay gap disparities
  • Ensure that your firm has the correct reward strategy in place to support the business and is transparent in its outcomes for all stakeholders
  • Assist the RemCo Chair in preparation of the remuneration report and narrative.
  • Provide directors with guidance in their duties, responsibilities and powers and make directors aware of all laws and regulations relevant to the company (training/on-boarding/induction) for RemCo members with respect to remuneration  laws and trends)
  • Takes response excellence, or preparing all or parts of the annual report (incl. rem report) and ensuring that statutory deadlines are met and that the statutory and regulatory disclosures are validated, particularly in relation to statements given on corporate governance standards and practices in the company
  • Ensure he schedule and work plan is met and relevant in terms of remuneration
  • The company secretary is responsible for complying with the listings requirements
  • The company secretary is responsible for all forms of communication with shareowners and may often be responsible for the relationship with analysts and the media
  • Will be critical in the rejigging of Board roles and responsibilities should members be required to stand down.

Tips on navigating the new reality

Having established what The Bill proposes to change and/or amend, and how this will impact various key stakeholders the questions is: What now? Gleaning insights from across Deloitte globally and marrying that with deep local expertise, we provide a quick guide on how to navigate the new reality:

  • Prudent to start early and be initiative-taking with engaging stakeholders around remuneration reporting and policies to ensure alignment and an informed vote.
  • Ensure alignment with best practise from a reward architecture perspective.
  • Ensure alignment with best practise from a reward governance perspective.
  • Understands trends and unintended consequences of decisions made now and the outcomes they may produce later.
  • Start tracking the pay ratios early and understand them before disclosure is required if top five bottom five doesn’t make sense – is there a better ratio in addition to the legislated one for your firm to make meaningful change.
  • Start defining your population and definition thereof.
  • Board member training.
  • Start early in preparation of remuneration disclosures for FY25 – get the right assistance and insights.
  • Allocate appropriate budget – the implication of getting it wrong will be far worse than scrimping early.
  • Seek expert advice and guidance – the new reality has some complexities and nuances that require deep expertise.
  • Thorough and holistic review of reward.
  • Canvassing of prior concerns raised by stakeholders specific to your company
    • Early engagement with them (company secretaries have a significant role)
  • Avoid surprises at year end through continuous stakeholder engagement and tracking of reporting requirements.

For more on this, you can reach out to our Pay Transparency & Rewards team.