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2010 and beyond - the END of business as we know it!
Nostradumus, in his lost book of images, allegedly predicted the end of the world and humankind in 2012. Although I am no psychic nor do I care much for predictions it does not take much psychic power to predict the end of the business world as we know it in 2010 for South African business people.
The promulgation of two critical acts namely the New Companies Act and the Consumer Protection Act changes everything we know about corporate and business law in South Africa! These changes are not all however, other challenging changes include the more aggressive prosecution of the Employment Equity Act and the criminalisation of the Competitions Act- this is also set to make your life as company director more strenuous and just plain scary.
It is rumoured that the commission has been instructed to fine a “minimum of 270 companies” during 2010 for non compliance to the Employment Equity act and to prosecute aggressively whilst critics believe that the criminalisation of the Competitions Act will have extremely negative effects on business. Another portion of the New Companies Act is Section 6, “Business Rescue and Compromise with Creditors”, I am of the opinion that it will have a massive impact, at least in the short term, on the credit environment in South Africa.
Where does this leave company directors? Is it still safe to be a company director?
The simple answer is that it places a huge burden on company directors and officers and potentially opens them to a tsunami of potential litigation, regulatory fines and stakeholder scrutiny. In the light of this I am of the opinion that Business Consultants and Financial Advisors are going to play a more vital role in the daily business life of directors. In a recent “survey” done by SINK or SWIM found that only 15% of the respondents have a trusted and active relationship with a financial advisor. Similarly in a couple of phone calls to brokers it became apparent that they do not understand the changing business environment, how business needs to adapt (or die) – in our words SINK or SWIM – not do they fully understand and grasp or even offer the intangible insurance products that they require.
Now some of the important questions that we need to answer are;
- Can I as a financial advisor be held liable if my clients business is not properly insured for these risks?
- Is it the prudent move to avoid the issue?
- Am I ready for the changes?
Financial Advisors already have a tough time with the need to comply to FICA, POCA, FAIS and soon the Consumer Protection Act. How will this impact your business and the inherent risk that you take in your daily activity?
To find out more about the New Companies Act and the Consumer Protection Act attend one of the SINK or SWIM: Cutting Edge Seminars that address business critical issues that are changing the face of business as we know it – to find out more visit www.sinkorswim.co.za