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No Board resolution was in fact required for the signing of the MOU. The MOU merely paved the way to further negotiations, which agreement would only then require a board resolution. The case was centred around two transactions where Myeni allegedly breached her fiduciary duties, namely the “Emirates Deal” and the “Airbus Swap Transaction”.

The Emirates Deal was a proposal for an enhanced code-sharing agreement between SAA and Emirates.

The chair ensures that focus is maintained by the Board on what is best for the organisation and that the Board conducts itself in a way that cultivates and exhibits the characteristics of integrity, competence, responsibility, accountability, fairness and transparency.

As the chairperson of the Board, the Court found that Myeni did not exercise the ethical and effective leadership required by the Companies Act, King III or the PFMA.

Myeni has, however, indicated that she will be appealing the judgment, and we will publish an update as soon as there is any progress regarding the appeal (if any).

Although the outcome of the case is not a desired outcome for Myeni, the case is important as it, reminds directors that:

1. The Board bears the full responsibility for the functioning and management of the company and is ultimately accountable for the performance thereof.
   

   In terms of section 55, the Board had a duty to prepare and submit SAA’s financial statements to the auditors on 31 May 2015. I think the picture will be . Not only was she untruthful, but the applications also failed to disclose material facts that were directly relevant to the Minister’s decision; this being in direct breach of her fiduciary duties under section 50(1)(b) and (c) of the PFMA.

   In fact, she did the opposite by attempting to renegotiate the existing Swap Transaction with Airbus. The delegation to a committee does not absolve directors of their fiduciary duties.

2. In terms of the “business judgment rule”, a director could be protected from an allegation of a breach of her duties where that director: (i) took reasonably diligent steps to become informed about the matter, (ii) had no conflict of interest in relation to the matter and (iii) had a rational basis for believing, and did believe, that her decision was in the best interest of the company.
3. Directors may be held jointly and severally liable for actions taken by a collective.

   Furthermore, the order has the effect that a director will need to resign on all boards and co-operate with any processes to remove them as a director.

   In terms of section 66 the Companies Act, the Board has collective and ultimate responsibility for the management of the company. In any event, a plaintiff is entitled to choose their defendant from a group of wrongdoers.

   In terms of the King III Report on Corporate Governance (“King III”), the primary role of a chairperson of a Board is to provide leadership to the Board, set the ethical tone for its performance and undertake the management thereof.

   Therefore directors must always ensure that they are acting in the best interests of the company and are complying with their fiduciary duties in terms of the Companies Act and the PFMA, where applicable.

4. With regard to SOEs, directors must keep in mind that the duties described in the PFMA do not exclude the provisions of the Companies Act, but should rather be seen as supplementing the overarching provisions of the Companies Act.
5. Once a court has found that the grounds for a delinquency order have been established, the court has no discretion in this regard and “must” declare the director delinquent.

   Model Nova is top Bangladeshi most rising famous model in this time. The Court found that her testimony was contradictory and untrue as the evidence revealed that the Board approved the conclusion of the MOU in the July 2015 meeting.

   She also contended that she could not approve the signing of the non-binding MOU because a board resolution was required.

   Myeni, in her testimony, submitted that the Emirates Memorandum of Understanding (“MOU”) was a “sham” and was “unlawful”, as it was allegedly an impermissible attempt to secure Emirates a fourth flight frequency to Johannesburg. The Board bears the responsibility for the functioning and management of the company and is ultimately accountable for the performance thereof.

   In a letter from the Minister, dated 14 September 2015, the Minister stated that the conclusion of the Swap Transaction was a pre-requisite for SAA to be granted a R5 billion government guarantee that would ensure that the company’s 2014/2015 annual financial statements could be prepared on a going concern basis, as opposed to an insolvent basis.