A critical analysis of the interplay between directors’ duties and the promotion of corporate social responsibility in Zimbabwe

Abstract

This detailed investigation and subsequent analysis seeks to resolve the question of the interaction of directors’ duties of care and acting in the best interest of the company relative to corporate social responsibility (CSR) in Zimbabwe. The method of the study is based on doctrinal desktop research encompassing comparative and critical examination of the link between the directors’ duties and CSR. This approach is necessary for a discussion of the developments in company law brought about by the Companies and Other Business Entities Act [Chapter 24:31] (COBE Act). The codification of directors’ duties in Zimbabwe has not abolished some common law principles from application as they operate alongside the statutory guidelines that mandate how directors are supposed to behave and exercise discretion in making decisions on behalf of a company. This dissertation amplifies questions around the role of directors and how their duties are to be interpreted and applied in the context of the current legislation, the common law and the business environment that motivates and affects how directors exercise discretion in decision-making and their approach to the competing interest of the need to pay attention to CSR. The dissertation focusses on the competing principles that arise from the legal makeup of a company which creates inherent conflict arising out of the requirement for directors to act with care and in the best interest of the company in circumstances where this requires directors at times to take into account the evolving business environment and expand the application of their duties over and above the interest of the company, which may conflict with the interest of the company to make profit. The issue requiring ventilation is the consideration of the approach that should be adopted by directors to avert this conflict. The issue concerning whether directors in applying their duties should prioritise CSR on a philanthropic basis, or whether there should be a rights based approach that mandates directors to prioritise CSR is a key aspect of this study. The essence of this research is not a new issue as this has been subject to prior study in general. However, the study is novel in relation to the COBE Act which places the study a new perspective in Zimbabwe. The interpretation and application of the duties under discussion relative to the current law as contrasted with company objectives to make profit, and considerations of CSR assumes fresh relevance requiring interrogation.