In a SENS announcement yesterday, Brainworks notified shareholders that it proposed certain amendments to the company's constitution to align the same with best corporate governance practice by establishing certain thresholds on borrowing powers and executive directors and/or other employees’ remuneration.
“If, in the future, the board requires certain thresholds to be exceeded, shareholders will be provided with an opportunity to consider and vote in respect thereof. The constitution amendments therefore provide shareholders with an ability to participate in material decisions which could place the company under significant financial difficulty,” the group said.
Brainworks said shareholders will accordingly be requested to consider the relevant special resolution pursuant to the constitution amendments and, if deemed fit, approve it with or without modification by written consent.
The move, largely unprecedented in South Africa's corporate governance, is suspected by some analysts to stem from recent corporate scandals in which executives and/or board members have found to have either hiked executive pay or engaged in projects to the detriment of shareholders who often have no other recourse.