Companies Amendment Act Changes Now Effective: Key Remuneration and Governance Implications

On 22 May 2026, sections 5, 6 and 19 of the Companies Amendment Act 16 of 2024 came into operation following the publication of a Presidential Proclamation in Government Gazette 54722. These provisions introduce significant amendments to the Companies Act 71 of 2008, particularly in relation to remuneration disclosures, shareholder oversight of remuneration practices, and alternative dispute resolution mechanisms. Importantly, the amendments became effective immediately, without any formal transitional period.

The commencement of these provisions has created a number of practical challenges for companies, auditors and governance professionals. Many entities may already have been in the process of finalising annual financial statements, annual reports and AGM documentation when the amendments became effective. The absence of transitional arrangements or detailed implementation guidance raises questions regarding first-time application and the extent to which companies can realistically achieve immediate compliance.

Enhanced remuneration disclosures in annual financial statements

Section 5 of the Amendment Act amends section 30 of the Companies Act. The amendment requires companies whose annual financial statements are subject to audit to disclose remuneration, and benefits received by each director and prescribed officer on an individually named basis. This represents a significant enhancement in transparency and moves away from disclosure approaches that may previously have aggregated information, or omitted the identification of individual prescribed officers.

Companies should, therefore, review their remuneration disclosure processes, information-gathering procedures and annual financial statement templates to ensure that all required remuneration information is available and accurately reported. Auditors will similarly need to consider the completeness and accuracy of these disclosures as part of their audit procedures. The amendments may also require entities to reassess how remuneration data is accumulated and approved throughout the financial reporting cycle.

New requirements for remuneration policies and remuneration reports

Section 6 introduces new sections 30A and 30B into the Companies Act, creating a statutory remuneration governance framework for public companies and state-owned companies. These entities must now prepare a remuneration policy and present it to shareholders for approval at the annual general meeting (AGM). The policy must provide shareholders with transparency regarding the principles, and objectives underpinning executive and employee remuneration practices.

In addition, public companies and state-owned companies are now required to prepare a remuneration report covering the preceding financial year, and submit it for shareholder consideration at the AGM. These requirements are intended to strengthen accountability and shareholder oversight of remuneration decisions. The new framework aligns South African corporate governance practices more closely with international trends that emphasise transparency and shareholder engagement on executive remuneration matters.

The practical challenge, however, is that some affected entities may have AGM timelines, board-approval processes and reporting cycles that were established before the commencement date. Questions have already arisen regarding the application of the new requirements to financial years that ended before 22 May 2026, but where the AGMs are still to be held after the effective date. In the absence of formal guidance, companies will need to carefully assess their specific circumstances and adopt a documented approach to compliance.

Changes to alternative dispute resolution

Section 19 amends section 166 of the Companies Act and expands the role of the Companies Tribunal in alternative dispute resolution processes. The amendment is intended to strengthen the Tribunal’s role in facilitating mediation, conciliation and arbitration mechanisms under the Companies Act framework. This may provide parties with a more accessible and specialised forum for resolving corporate disputes without resorting to traditional court proceedings.

While the remuneration-related amendments are likely to receive the greatest attention from preparers and auditors, organisations should not overlook the implications of the dispute resolution amendments and the evolving role of the Companies Tribunal in corporate governance matters.

Practical considerations for practitioners

SAICA has noted the implementation challenges arising from the immediate commencement of these provisions, particularly given the absence of transitional arrangements and supporting guidance. Practitioners are encouraged to urgently review the amendments, assess the impact on affected clients and entities, and consider the implications for annual financial statements, remuneration reporting processes and AGM planning.

Given the significance of the changes and the uncertainties surrounding first-time application, companies, auditors and governance professionals should closely monitor further guidance from regulators and professional bodies. SAICA has indicated that it continues to engage with relevant stakeholders regarding implementation concerns and practical guidance. Until further clarification is issued, a proactive and well-documented compliance approach will be essential in managing regulatory risk and demonstrating good corporate governance.

References

1. Government Gazette 54722, Proclamation notice 313 of 2026, Commencement of certain sections of the Companies Amendment Act, 2024 (Act 16 of 2024)
2. Companies Amendment Act, 2024 (Act 16 of 2024)

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