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Tips and Ideas to Retain Your Best Staff and Skills During COVID-19

08/09/2020 14/05/2021

In the highly competitive local economy, disrupted by the arrival of the COVID-19 pandemic, firms more than ever cannot afford to lose their best staff and skills.

This piece provides critical insight from leading business thinkers including practical advice that you can implement to ensure you retain your best performing staff and skills so as to avoid the significant cost of having to hire new people.

We also bring you a vital understanding of how employees’ needs and requirements have radically changed due to the national lockdown and COVID-19.

The piece also provides advice from experts for keeping your employees motivated and keen to stay at your company.

Small businesses across South Africa face the challenge of keeping their best staff and skills during the COVID-19 pandemic to ensure that they can survive these hard times and can thrive when the economy picks up again.

For small and medium enterprises (SMEs), keeping top talent is vital to ensuring that these companies deliver effective products as well as services to their clients.

This comment comes from a “thought paper” published in June this year about talent management and penned by six University of Pretoria master’s students.

The right talent is a differentiator

The right talent was a key differentiator for companies to gain a competitive advantage and attain future success, they wrote.

They defined the right talent as “giftedness, individual strength, meta-competency, high potential and high-performance workers”.

“Employees are a crucial and valuable element of any organisation. They are the life force that drives innovation, profitability and sustainability,” they added.

Nishan Pillay, Gordon Institute of Business Science’s (Gibs) executive director for open programmes, said during an interview that it was vital for small businesses to keep their high-performing staff.

A quote to bear in mind

The master’s students’ paper included a quote that is worth bearing in mind when considering strategies to keep top people.

It comes from the former chairman of the Citicorp, Walter Wriston, who said: “Human capital will go where it is wanted, and it will stay where it is well treated.”

“In a time of… disruption, evolving technology, stiff competition, and increased demand for limited talent, no organisation wants to lose their top talent that they have invested so much in to acquire and develop,” the master’s students wrote.

Costly to replace staff that exit

Adding to the picture is that it is expensive and time-consuming to replace staff.

Alex Nieuwoudt, manager of recruitment firm Michael Page’s finance and legal team in Johannesburg, said during an interview that it could cost between R150 000 and R350 000 to fill a middle to senior role.

“Hiring people, getting them to know your culture and systems, is hugely expensive. Recruitment costs aren’t just about the agency costs of bringing someone in, it’s about the training, development and the cultural assimilation,” Gibs’ Pillay said.

Changing candidate questions

It is also worth noting that candidates that Michael Page interviewed before COVID-19 focused their questions on the job in question.

But now the critical issue for these candidates was how the company doing the hiring was coping with COVID-19, Nieuwoudt added.

It was essential to answer these questions accurately, as a new hire would find the truth once he or she joined the company and could leave if what they discover wasn’t to their liking. Thus the company would have to incur all the hiring costs again, he said.

Given this, it is essential that when small businesses advertise for a post that they have their answers ready for this burning topic.

Four strategies to keep staff

There are many strategies that companies can use to keep staff.

Nieuwoudt suggested four strategies that SMEs can consider for keeping staff. These four strategies are:

Allowing staff flexible working conditions,
Empowering employees,
Providing virtual wellness, which is where the company gives their employees the means to operate successfully remotely while maintaining staff motivation,
Promoting staff and acknowledging their achievements.

Virtual wellness is also determined by a company’s reputation, including its corporate social responsibility schemes. This measure impacts on employee mood and decisions about whether to join and then stay with the company, Nieuwoudt said.

The desire for flexible employment

Michael Page ran a poll recently, and 84% of the respondents wanted their companies to give them a permanent option to have flexible conditions of employment, Nieuwoudt said.

“This gives you an understanding of how the mind-set of employees has changed in South Africa,” he added.

“Flexible working conditions are now at the forefront of hiring conversations. It is very critical to keep that in mind,” Nieuwoudt said.

Digital working is vital

Geoff Jacobs, president of the Cape Chamber of Commerce & Industry, advised that for companies to keep their staff, it was vital for them to move to the digital way of working, especially given the COVID-19 social distancing requirements.

Jacobs also suggested in response to questions that to allow for easier retention of staff, SMEs should review all expenses, especially rent.

A third retention tactic that he suggested was that small companies remodel the roles of their staff, so they take on extra duties or get the employees to help the company offer new services and products given the opportunities because of COVID-19.

If a company had to retrench staff, it was critical that the business part with its staff on the best possible terms so that when the economy grows again, these former employees would be keen to re-join the business.

Recruit from your pool of alumni

Karel Stanz, a University of Pretoria professor, said during an interview that hiring a company’s former employees or alumni was one of the most cost-effective ways of recruiting staff.

He is a professor in industrial psychology at the Department of Human Resource Management at the university.

Jacobs also advised that as part of the staff retention strategy, small companies should ensure frequent interaction across digital platforms.

“Build online communities that aid in social interactions for employees preferring flexible work arrangements. These online communities allow employees to interact with colleagues, superiors, and clients. It also allows the organisation to monitor the employees’ engagement levels and needs,” the University of Pretoria master’s students wrote.

These students in their paper also listed the following measures to ensure a company keeps its top staff:

Have a conducive company culture,
Provide staff with meaningful work,
Offer employees career advancement
Provide staff with a sense of belonging.

They also referred to respect, recognition and rewards as necessary means to keep staff.

Opportunity to gain scarce skills

In a surprising turn of events, Stanz said that the COVID-19 pandemic had provided specific companies with a chance to gain scarce skills.

He said that a former student of his was working in a human resources role for a timber company in Nelspruit.

Before the lockdown, it was difficult for this company to find people with technical skills such as artisans.

But ArcelorMittal South Africa retrenched many people, including artisans, and this has provided the timber company with access to these skills.

Digital skills important

Dr Jabulile Msimango-Galawe, Wits Business School programme director for business and executive coaching, said in response to questions that during and after lockdown, some businesses would continue to work online.

“People in the digital space with the required skills will need to get businesses trading again, and marketing online will be in demand,” Msimango-Galawe said. These skills would include analytical and digital capabilities, she added.

Attitude is key

“From what we’ve seen in the past few months, it’s not so much skills that you need to keep, but the attitude of your staff that supports the values of the business,” Jacobs added.

Individuals with multiple skills would be in demand and the era of having one critical skill was over, Msimango-Galawe said.

Michael Page’s Nieuwoudt said that essential skills right now included candidates that helped companies achieve their employment equity targets.

Gibs’ Pillay identified types of people and critical areas of skill where small businesses needed to keep staff, and these included staff with high levels of creativity as well as those with strong people skills.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Fraudsters are Everywhere: Cybercrime up 667% since Lockdown

07/07/2020 14/05/2021

It didn’t take the online fraudsters long to realise that the coronavirus lockdown has opened up a whole new avenue of opportunity for them.

Malware, phishing and ransomware attacks are surging, and schemes offering some form of financial relief are particularly evident. All forms of online communication including emails, SMSes and Social Media posts should be treated with caution.

We share tips on how to protect yourself and your business in these dangerous times, with news on some of the more common scams going around and a link to the latest examples identified by SARS.

There has been a surge in internet scams over the past three months – from malware, phishing and ransomware to obtaining your log-in details.

Take extra precautions such as dual authorisations for payment, carefully validate new beneficiaries and get your IT staff or consultants to regularly check that no malware is loaded onto your IT platforms.

Recently, SMSes were being sent out from the “Public Investment Corporation (PIC)”, promising money from a “Business Personal Relief Fund”. If you replied, you got an approval letter and money was promised once you paid a “handling fee”. If you Google the PIC, there is no mention of Covid-19 relief money.

SARS have reported scams whereby taxpayers get messages from “SARS” about their income tax return or about an audit on the taxpayer or asking for missing documents and you are asked to disclose confidential information in your reply to “SARS”. See some examples of the latest scams on the SARS “Scams and Phishing Attacks” page.

There are other scams involving Transnet.

Treat emails, SMSes, and Social Media with caution, particularly if you get offered some form of relief.

Who will Emerge as Winners and Losers in the Post Covid-19 Marketplace?

07/07/2020 14/05/2021

As we wend our weary way through the pandemic and the lockdown’s economic fallout, let’s not lose sight of the fact that eventually we will inevitably return to some form of “normal”. As the wry Internet joke has it “This too will pass. It may pass like a kidney stone, but it will pass.”

We can all of us – businesses, investors, individuals planning our futures – profit from understanding how there will be both winners and losers emerging from this period of fundamental disruption. We analyse the evolving trends that are driving and will continue to drive this process, with examples of those sectors expected to end up as big winners, and of those predicted to be big losers.

Many trends that emerged in the lockdown period will almost certainly continue post Covid-19. Technology, for example, has received a huge boost with products like Zoom now household names.

One thing we shouldn’t forget is that periods of anxiety and boredom provide a perfect platform for creativity to flourish. Hopefully, many of you have taken the extra time that lockdown gave you to flesh out the idea that you have had for many years.

The winners are…

The big trend of the global lockdown has been the move to working from home which has worked out well and is set to continue.

There will be many spinoffs from this:

Home improvements will benefit as people spending a lot more time at home will become aware of items that can enhance their houses. Furniture companies will get more business. Redecorating businesses will also see an uptick in their sales as will TV and sound systems suppliers.

The businesses where staff work at home will be able to scale back on the size of their offices (there will still be a demand for offices, but it will be reduced). As rent is usually one of the high cost items that most businesses have, this downsizing will contribute to cost reduction. Another cost saving will be in reduced travel costs as staff will continue to take advantage of virtual meetings and save travel time – companies will see less airfares and petrol costs along with reduced accommodation and meal costs.

With the reality of climate change and the petrol industry slowly dying, there will be renewed focus on solar and wind energy. This swing to renewable energy will bring in a new surge in investment – something badly needed in the difficult economic times ahead.

Smaller towns stand to gain from this as people working from home realise they can relocate to a simpler, healthier lifestyle (a recent survey in New York showed that 50% of those surveyed would like to move out of big cities). Already parts of the Karoo are marketing the attractiveness of living in quieter and cleaner areas and are upgrading technology so that people can work there.

Distributors and online shopping should continue to be amongst the winners as consumers see how convenient and efficient ordering online is.

Health products and pharmaceuticals should also be successful post Covid-19 as people have grasped how important staying healthy is.

And the losers…

The property sector has already taken some body blows – the retail sector and shopping malls will need to think creatively as consumers take to online shopping and spending will remain weak for a while. Whilst an obvious solution might be to convert shopping malls into residential units, the potential trend of people moving out of the large cities could negate this.

Office blocks will also be under pressure as demand for office space will likely continue to fall. Again, creative thinking may be needed, perhaps along the lines of office “hot seating” i.e. allowing different people to book a desk for say a day or a few days a week, or conversion to residential or small industrial units.

Industrial properties may experience some success as distribution centres for online sales grow and companies bring crucial parts of their supply chain back from overseas production.

The coal, oil and gas industry will continue to decline. Before Covid-19, many financial institutions were refusing to finance projects in these fields and they expect renewables and electric cars to become more prominent.

Tourism and the travel industry will take time to recover as consumer spend will remain muted due to ongoing job losses. This will have knock–on effects on restaurants, hotels and bed and breakfast facilities which additionally have been struggling with lockdown restrictions.

It will take a while for the world and South Africa to recover from Covid-19 with forecasts that the first world will not get back economically to where it was in 2019, until at least 2022. In South Africa it will take even longer.

Giving is Good – Just Know Who You are Giving To

07/07/2020 14/05/2021

There are many worthy causes trying to help vulnerable South Africans in this time of national crisis. Supporting these initiatives is of course absolutely the right thing to do, and the only note of caution to be sounded before you make a donation is this – if you are approached by an organisation claiming to be a genuine NPO (Non-Profit Organisation) or PBO (Public Benefit Organisation), undertake some due diligence before committing to anything.

We show you how to check that anyone soliciting donations is on the level, we discuss the question of tax-deductibility (with a special mention of The Solidarity Fund’s enhanced PBO status), and we share some thoughts on creating a formal “giving policy”.

There is usually an upsurge in giving when there is a severe crisis. COVID-19 is no exception – witness the outpouring of help for vulnerable people who face lockdown without income or food.

This reaction is to be admired as it affirms our humanity, but it is worth doing some due diligence on who you are giving to, especially considering the sudden spate of NPOs (Non-Profit Organisations) and people soliciting donations and assuring you that whatever you give is either tax exempt or tax–deductible as they are a PBO (Public Benefit Organisation).

It is easy to verify these claims

Although it is not mandatory to register as an NPO, virtually all non-profit organisations do so as it shows a commitment to the spirit of altruism and good governance required of such organisations. NPOs are under the jurisdiction of the Department of Social Development (DSD) and it is a quick process to check if an NPO is registered here by typing in the box the name of the NPO.

Many of these NPOs are also PBOs which are usually registered with SARS to enable you as donor to claim the tax allowances available, and can be verified on the SARS website.

Other due diligence

Ask the NPO to give you proof that the money you are giving is going to where the NPO promises. This is a standard requirement – Foundations that give to NPOs require that they report back verifying not only that the money was correctly spent, but also showing the impact this giving has had on the targeted individuals and communities.

When you make a donation to a section 18A registered PBO, they must issue you with a prescribed certificate that SARS will require you to submit when you claim the deduction in your tax return. The certificate also verifies that the donation will only be used for certain purposes as prescribed by law and approved by SARS.

Formalise your giving

Instead of donating to causes on an ad-hoc basis, why not have a “giving policy”? Establish how much you are prepared to donate and the causes you want to support. Many companies are now encouraging their staff to donate to good causes.

To do this, an understanding of tax legislation is important –

Donations tax

A company will not incur donations tax for the first R10 000 per annum in donations and an individual R100 000 per annum – any amounts over the company or individual limit are taxed at 20%.

Note that you cannot claim a tax deduction for any donations tax you pay in this regard.

PBOs

Over and above this, SARS allows both registered and non-registered NPOs that meet the legal criteria in the Income Tax Act to register as a PBO. One advantage of being a PBO is that individuals or companies will not be subject to donations tax on their donations to the PBO even for amounts over the limits set out above.

To also get a tax deduction, check that the PBO is registered in terms of section 18A of the Income Tax Act – only those PBOs which are additionally approved by SARS in terms of section 18A can also issue donation tax receipts for donations received. Donors can then deduct up to 10% of their taxable income (for individuals, adjusted for retirement lump sums and severance pay) from donations to PBOs on assessment of their taxes. Note that SARS will require presentation of a valid donations tax receipt from the donor to claim the deduction. Should the individual or company have given more than 10% of their taxable income in one year, then the excess over 10% can be carried over to the next year. Thus, you get favourable tax treatment by donating to PBOs.

Staff can also get tax relief on their PAYE through “payroll giving” whereby the employer donates on their behalf up to 5% of the employee’s remuneration (adjusted for pension and RAF contributions) to qualifying section 18A PBOs. The donation will then be reflected on the employee’s IRP5 at the end of the year and the PBO will issue a section 18A receipt to the employer as proof.

Having a company–wide giving campaign will forge closer links with employees, as this is something all the staff can be involved in and buy into.

There are intricacies to this aspect of tax, so consult your accountant.

The Solidarity Fund

This fund has been set up as a COVID-19 relief fund and has PBO and section 18A status which has been enhanced to allow taxpayers donating to it to claim 20% of their taxable income as a deduction. There will thus be a limit of 10% for any qualifying donations (including donations to the Solidarity Fund in excess of its specific limit) and an additional 10% for donations to the Solidarity Fund. Where staff elect to do “payroll giving”, employers can deduct up to either 33% for 3 months during 1 April to 1 July 2020 or 16,6% over 6 months during 1 April to 1 September 2020 for the 2021 tax year, of employees’ remuneration, when staff donate to the Solidarity Fund. The same rules apply in terms of section 18A certificates as covered above – make sure that you will get a section 18A receipt.

Having a policy of giving leads to more consistent and larger flows of funds to non-profit entities. Not only does this help the less fortunate communities, but it makes our society (and therefore our businesses) more sustainable.

Technology, COVID-19 and How the World Will Change

09/06/2020 14/05/2021

We must all adapt to the rapidly-changing world thrown at us by the pandemic. We have no alternative – both our businesses and our personal lives are already deeply dissimilar to what they were only a few short months ago, and there is no sign that things will start stabilising any time soon.

What part is technology playing in this process, what part will it play in the future, and will it be used as a weapon or as a helpful tool? What will our post-pandemic world look like? Who better to ask than the President of Microsoft, so we share his thoughts on these questions in a discussion ranging from the impact of online crime to the future of offices and the shift to remote working, the fight against fake news, the role of Artificial Intelligence, and much more.

“There are decades where nothing happens; and there are weeks where decades happen” (Vladimir Lenin, who would have known!)

In a recent seminar, the President of Microsoft, Brad Smith, gave his thoughts on what is unfolding in business due to COVID-19, plus how he saw the post-pandemic world.

Fasten your seatbelts!

Ransomware and hacking rose to high levels in 2019 and there is no sign this is abating. For example, private patient data is being hacked in U.S. hospitals with demands that unless a ransom is paid, the data will be put in the public domain.

As many people now work from home, so vulnerability to being hacked is rising. People should “strap on their seatbelts” and take precautions – a two-pronged approach is often used now and is effective in containing the vast majority of hackers. For example, using a password and then getting an SMS to use a PIN to activate a PC.

Up your digital skills

Working from home will almost certainly continue to be widely used after the pandemic is over, so it will pay long term dividends for staff to hone their digital skills now.

These two points may seem obvious, yet in the rush to swiftly react to COVID-19, they are often being overlooked.

Keep your company culture alive

Spending most of your day looking at a screen is not conducive to fostering the business’s culture. Frequent news on how people in the company are doing plus the company’s performance and human interest stories such as how the company is helping its staff and communities in alleviating the plight of those adversely affected by the Coronavirus will help to lift the spirits of your staff.

The future of offices

The trend of working from home has been successful and Smith expects some form of hybrid between employees at the office and working from home to emerge in the post–pandemic years. The saving in travel time resulting in increased productivity plus a greener environment from less travel ensure that working from home will be a feature in future business. But there will still always be a need in many businesses for an office. Let’s not forget that man is a social animal and requires human contact.

Upheavals, history and massive changes

Great events have long lasting impacts on future generations. The Second World War transformed air travel from a small elite industry into a mass transport business which led to massive growth in airlines and the tourism sector. It also gave impetus to globalisation.

Another trend from the Second World War that has had a lasting effect was the harnessing of research at universities by governments which led to technological breakthroughs.

With the aftermath of COVID-19, Smith expects that online business will be fully embedded in businesses due to the innovation surge which has followed the emergence of Coronavirus.

Another important feature has been the rapid assimilation of data to help governments quickly understand and fight COVID-19. As the stakes in this pandemic are extremely high, the emphasis has been on providing fact-based information which is transparent and can be interrogated. The search for a vaccine illustrates this – usually it takes up to ten years to find a vaccine but there is hope that this can be reduced to ten months and be ready before the end of the year.

6 principles to fight fake news

A bugbear for all countries that just seems to keep growing is “fake news” and the growing amount of false information on the internet. Smith says that disinformation spreaders have found it difficult to fight the massive amount of scientific data that has been put out in fighting COVID-19. Microsoft now uses six principles when developing software to support open government, which are:

Fairness – all people will be treated fairly.
Transparency – the system will be fully documented, and capabilities and limitations will be set out.
Accountability – technology can have a significant impact on people and an appropriate level of human control will be exercised to prevent adverse consequences from occurring.
Non-discriminatory – no unlawful discrimination will be allowed.
Notice and Consent – people subject to the technology must consent to its use.
Lawful Surveillance – Microsoft will campaign for people’s rights to not be infringed by use of software.

Smith said if these principles can be accepted as an industry standard, it will promote openness which will reduce the impact of “fake news”.

There has been limited application for Artificial Intelligence (AI) in combating the virus, but it has been useful for example in diagnosing whether a caller needs to come into a clinic or hospital and take a coronavirus test. This allows medical staff to focus on helping the confirmed sick. AI is also being used to predict how severely affected each patient who tests positive will be and it helps tailor the treatment the person should undergo.

Lastly, and very importantly, it has shown how important co–operation is in finding answers to COVID-19. Without multilateral and bilateral approaches, it will take longer to find solutions.

Smith said technology can be used either as a weapon or a helpful tool. It is up to governments and civil societies to ensure that it is used as the latter.

How Different Will Our Landscape Be Post-Coronavirus?

09/06/2020 14/05/2021

Predicting the future can never be easy, but we all of us need to prepare as best we can for the future landscape that will greet us when the current COVID-19 crisis is finally over.

Perhaps we can learn a lesson or two from the history of the world’s past global pandemics and their after-effects on people, societies, and economies.

With that in mind, commentators have suggested four main trends which they think likely to characterise our post-coronavirus world.

“Forewarned being forearmed”, let’s have a look at them…

“Prediction is very difficult, especially if it’s about the future” (Niels Bohr)

Pandemics kill more people than wars – the introduction of the Black Death plague led to 14th Century Europe losing 40% of its population within two years. What will our world look like when normal life begins to return?

Predicting the future can never be an exact science, but the consensus seems to be that the following four main trends are, in line with historical precedent (except perhaps the 1918 Flu Pandemic which was dwarfed by the effects of the First World War) likely to await us –

Labour is stronger, capital is weaker

A recurring feature of pandemics is that workers get higher wages for up to four decades after the end of the pandemic. Already, a strike at Amazon has led to better benefits for workers. In South Africa, we have seen health workers demanding better protective equipment.

Research shows that this increase comes at the expense of capital which means lower returns for shareholders.

Globalisation will be weakened

Coronavirus has exposed the flaws within global supply chains, such as an over reliance on China supplying key medical ingredients. Governments are reducing this risk by turning to local manufacture and services for such ingredients. Thus, globalisation will be clipped in favour of local production and services – creating opportunities for South African companies.

Slow recovery

The end of a war is accompanied by massive investment as businesses and infrastructure are rebuilt. This usually quickens economic growth. Pandemics result in no or anaemic growth – there is no scope for massive investment and economic recovery takes a while to reboot.

This is exacerbated by people feeling down and exhausted after the pandemic. They are cautious and save money, contributing further to the economic malaise. This reduction in economic activity leads to low interest rates.

Victimisation

Another thread running through post–pandemic times is people looking for someone to blame for the virus – often foreigners become the targets. Here with our record of xenophobia, this is something we need to guard against.

Whilst the historical evidence of events after a pandemic points to difficult times, there may be opportunities for your business in, for example, the reduced global supply chain. You will also need to keep an eye on your staff to keep their morale up.

COVID-19 and Directors: Your Duties and Liabilities in the Coronavirus Crisis

21/05/2020 14/05/2021

Your focus as a director right now will no doubt be on keeping your business afloat through these trying times.

Don’t lose sight however of the fact that the onerous obligations and duties placed on all directors by the Companies Act still apply. Failure to live up to the required standards exposes you not only to a significant risk of personal liability for company debt, but also to criminal prosecution.

We recap in summary what the Act requires of you, we discuss the impact of King IV on your risk profile, and we end off with a caution on the extent to which you can rely on indemnity insurance for cover.

There are significant obligations placed on directors by the Companies Act and personal and criminal liabilities if they fail to meet these obligations.

As a director you will no doubt be focusing on critical issues like keeping your business afloat and solvent (the CIPC has waived its right to intervene when a company becomes temporarily insolvent due to the lockdown and other restrictions imposed. This concession will be withdrawn 60 days after the lifting of the National Disaster regulations), don’t forget that the Companies Act is still in force.

The coronavirus has created an unprecedented situation which demands swift, decisive action by directors – for example, the President only gave the country 72 hours’ notice before the lockdown came into effect, which gave little time for directors to react to the new reality.

No change in your duties or liabilities

Despite the coronavirus there is no change to the duties or liabilities of directors. They must perform their role:

“in good faith…,

in the best interests of the company

with the degree of care, skill and diligence that may reasonably be expected of a person –

(i) carrying out the same functions in relation to the company as those carried out by that director; and

(ii) having the general knowledge, skill and experience of that director.”

“Good faith”, “best interests” and “care, skill and diligence” are onerous terms. For a director to be protected against falling foul of these provisions that director needs to show that he/she took diligent steps to be informed of the issue and made a rational decision in the best interests of the company. This is known as the Business Judgment Rule and courts look to this when considering a director’s personal liability.

The impact of the King IV Report

When considering the Business Judgment Rule, the courts have relied on whether a director followed the King IV Code of Good Governance when reaching their decision.

One issue that will arise with the coronavirus is that King IV mandates that a company be a good corporate citizen and part of this is to look after the health and safety of employees (following the requirements of the Occupational Health and Safety Act and now government’s Disaster Management Act Regulations) – for example, were adequate steps taken in terms of the National State of Disaster declared by the President such as social distancing (working from home where feasible) and ensuring employees had access to masks, hand sanitisers and so on at work?

Failure to comply with King IV in this scenario means directors will not be able to rely on the Business Judgment Rule and can be held personally liable for losses incurred.

Will your indemnity insurance cover you?

Directors can take out indemnity insurance, covering claims awarded, in their personal capacity, when they commit “wrongful acts”. However, the insurance will not apply if there is “wilful misconduct or wilful breach of trust” by the director (check your policy’s exact wording). An example might be the director being convicted under the Occupational Health and Safety Act.

As a director you could find yourself being held personally liable for your decisions and being denied access to your indemnity insurance cover.

Dealing with the pandemic increases the pressure on directors but doesn’t absolve them of their liabilities.