The Companies Act 61 of 1973 states that all directors and/or officers of companies are obligated to declare their interests and all details regarding their interest, whether directly or indirectly, in a current contract or future contract where the company is involved in.
Declaring of interests of current or future contracts has to be done regarding all contracts of the organization that has been proposed, to follow a decision that has been made, by the main board or board of directors of the organization. Directors and/or officers may also, with the endorsement of the main board or board of directors, enter into current or future contract.
The declaration of interest must be submitted by the director and/or officer, in writing, to the board of directors or main board. The declaration must state that within the period of the contract, the director and/or officer is employed by the organization, and that his/her/their interest in the contract is not to help them, their friends, family members, or anyone else, only for the good of the organization. The declared interest must be the true interest, and there must not be any other interests regarding the contract.
The organization must have a conflict of interest policy that must be valid to the end of the financial year of the specified organization, and the policy may be amended and renewed as necessary.
Any director and/or officer of an organization that doesn’t declare their interests, is guilty of an offence.
The Companies Act 61 of 1973 is not allowed to be used to restrict directors and/or officers from an organization to participate in a contract, of which the do not have a conflict of interest with.