The Role of CEO
The chief executive officer (CEO) is the highest-ranking executive at any
given company. Their main responsibilities include managing the firm's
operations and resources, making major corporate decisions, being the
main liaison between the board of directors and corporate operations, and
serving as the public face of the company.
CEOs often have a position on the board and they're sometimes the chair.
Other titles for CEO include managing director and sometimes even
president.
The board of directors is elected by the shareholders of a company. It's
usually composed of both inside directors who are senior officers of the
company and outside directors who are individuals not employed by the
company.
The board establishes corporate management policies and decides on bigpicture corporate issues. The board is in charge of executive functions and
the CEO is responsible for integrating company policy into day-to-day
operations so the CEO often fills the role of chairperson of the board.
IMPORTANT
The board of directors generally sets the policy, the president executes the
policy and reports back to the board, and then the board reports back to
the shareholders, the ultimate owners.
Another factor that determines the positions of company officers is its
corporate structure. There may be one CEO in a corporation with many
different businesses (a conglomerate) who oversees several presidents,
each running a different business of the conglomerate and reporting to the
same CEO.
It would be unusual to have one person carry out the roles of both CEO
and president in a company with subsidiaries although it does happen at
times, often with smaller businesses. The small business is often owned
by the same individual who is the CEO and president.
The Role of President
The president is the leader of the company’s executive group in some
corporations and organizations. The president often refers to someone
who's the leader of a segment or critical part of the overall company in the
corporate world, however, rather than the leader of the overall company.
The president is also the CEO in some cases. The president might also be
the owner of the company in small businesses. The president is second in
command in an organization or company where a CEO is already in
charge.
Presidents often hold the position of chief operating officer (COO) in the
corporate world. The COO is responsible for day-to-day operations and
has vice presidents for different parts of the company reporting to them.
Other roles of the president can include creating a vision for the company’s
future and working to make it a reality, establishing and overseeing the
company’s budget, and analyzing budgets and financial reports to monitor
the company’s financial needs.
How Is a President Different From a CEO?
A CEO is tasked with carrying out a company’s mission statement,
managing its overall strategy, and ensuring its strong financial
performance. A president is primarily responsible for the operational
management of a company.
Who Can Fire a CEO?
A CEO is generally hired and fired by the board of directors of a company
but firing them may not always be a smooth process. Hiring them gives the
chairman of the board power over the CEO. A board can fire the CEO and
replace them if it feels that the CEO isn't performing at acceptable levels.
What Is a Chief Financial Officer (CFO)?
A chief financial officer (CFO) is a senior executive responsible for
managing the financial actions of a company. The CFO's duties include
tracking cash flow and financial planning as well as analyzing the
company's financial strengths and weaknesses. The CFO also proposes
corrective actions.
The role of a CFO is similar to a treasurer or controller because they are
responsible for managing the finance and accounting divisions and for
ensuring that the company’s financial reports are accurate and completed
in a timely manner.
KEY TAKEAWAYS
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A chief financial officer (CFO) is a top-level executive.
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The CFO is a financial controller who handles everything relating to
cash flow, financial planning, and taxation issues.
A CFO is often the highest financial position and the third-highest
position in a company, playing a vital role in the company's strategic
initiatives.
Role and Responsibilities of Chief Financial Officers
(CFOs)
The chief financial officer is a member of the C-suite, a term used to
describe the most important executives in a company. Alongside the CFO,
these roles include the chief executive officer (CEO), the chief operating
officer (COO), and the chief information officer (CIO).
The CFO role has emerged from focusing on compliance and quality
control to business planning and process changes, and they are a
strategic partner to the CEO. The CFO plays a vital role in influencing
company strategy.
Becoming a CFO requires a certain degree of experience in the industry.
The majority of people who end up in this position have advanced degrees
and certifications, such as a graduate degree in finance or economics, and
the Chartered Financial Analyst (CFA) designation. It also helps to have a
background in accounting, investment banking, or analysis. 1
People in this role have significant input in the company's
investments, capital structure, and how the company manages its
income and expenses. This corporate officer may assist the CEO with
forecasting, cost-benefit analysis, and obtaining funding for various
initiatives. Regulations and Compliance for CFOs
The CFO must report accurate information because many decisions are
based on the data they provide. The CFO is responsible for managing the
financial activities of a company and adhering to generally accepted
accounting principles (GAAP) adopted by the Securities and Exchange
Commission (SEC) and other regulatory entities.
Is a CFO an Accountant?
Generally, no, a CFO is not the same as an accountant. Accountants
handle bookkeeping tasks and tax filings. Meanwhile, a CFO focuses on
the company's financial future, creating forecasts.
A chief operating officer, or COO, is the overall leader of a company’s
operations and a member of the C-suite. While the role may vary by industry
and company, COOs typically oversee manufacturing and supply chain, as well
as other planning or administrative functions. As the strategic engine behind
operations, the COO ensures efficient and effective processes and activities to
provide goods or services for customers. The COO not only manages the
people and assets critical to serving customers but also thinks about how to
build competitive advantage through operational excellence. The COO role is
pivotal in steering the company toward its strategic objectives.
What Is A COO?
The COO is the most senior operations leader in the company, reporting to
the CEO. The role is found across industries and can be very broad, including
research and development, product design, procurement, manufacturing,
distribution, transportation and even customer support. The COO is
sometimes supported by a vice president of operations. Instead of a COO,
some companies divide these responsibilities across multiple senior roles,
such as heads of manufacturing or logistics.
A COO’s mandate extends beyond managing today’s operations to long-term
optimization and improvement. This means a COO often recommends or
decides on operating and capital investments. Good operations leaders
spearhead continuous improvement and ensure financial and human capital
resources are well utilized. They think about the end-to-end execution of
strategic priorities to keep capabilities up to date. They collaborate with the
chief technology officer (CTO) and data leaders to utilize digital improvements
for gains in productivity and business value.
Unlike the CEO role, the COO role doesn’t include the commercial side of the
business, such as sales or marketing. Therefore, the CEO owns the overall
profit and loss statement of the business, while the COO typically focuses on
controlling expenses and ensuring return on investments.
What Does A COO Do?
The COO ensures efficient and effective operations. For instance, in
manufacturing businesses, a COO is accountable for running plants and
logistics. In a retail business, a COO is accountable for running stores and
distribution centers.
In any scenario, COOs spend time reviewing production or service metrics to
guarantee the organization is fulfilling customer orders on time and at the
desired cost. They create detailed operating plans for where specific activities
should occur in order for operations to run smoothly. They also lead projects
to build new capacity or capabilities and implement quality and safety policies.
COOs manage a team of operators, which they may organize by product or
plant type, geography or functional specialization, such as transportation.
A Managing Director is a senior executive responsible for
leading and overseeing the strategic direction, operations, and
performance of an organization or business unit, driving growth,
profitability, and sustainable success.
Statutory Requirements Under the Companies Act 71 of 2008
Section 86(1) of the Companies Act 71 of 2008 mandates that every public company and stateowned company must appoint a company secretary. For private companies, the appointment of a
company secretary is optional and is only required if the company’s Memorandum of
Incorporation (MOI) stipulates such a requirement.
In other instances, private companies that do not have this requirement in their MOI may still
elect to appoint a Company Secretary to enhance their governance processes. This decision
reflects a commitment to good governance practices and the proactive management of risks,
regardless of statutory obligations.
The Act outlines specific qualifications and responsibilities for the company secretary:
2. Duties: The core responsibilities of a company secretary include ensuring compliance with
statutory requirements, maintaining company records, and facilitating communication between
the board of directors and shareholders. They play a pivotal role in ensuring that the company
adheres to legal obligations and governance standards.
The King IV Report and Principle 10
The King IV Report, a hallmark of corporate governance in South Africa, emphasizes the
importance of ethical leadership and corporate citizenship. Principle 10 specifically focuses on
the role of the company secretary as a key governance professional, highlighting a few critical
aspects:
1. Independence and Objectivity: A company secretary must act independently, providing
unbiased advice to the board and ensuring that corporate governance principles are followed
without conflict of interest.
2. Facilitation of Governance Processes: The company secretary is responsible for
coordinating the functioning of the board and its committees such as facilitating board meetings,
ensuring that the board’s decisions are well-informed and compliant with legal frameworks. This
includes the preparation of agendas, minutes, and ensuring that all necessary documentation is
in order.
3. Approval by the Board: Principle 10 underscores the importance of the board approving the
appointment of the company secretary, including the employment contract and remuneration of
the company secretary. This reinforces the authority and accountability of the company secretary
within the governance framework.
4. Stakeholder Engagement: The company secretary serves as a bridge between the company
and its stakeholders, ensuring transparent communication and fostering trust.
The Impact on the Role of a Company Secretary in South Africa
The interplay between the Companies Act and King IV significantly shapes the role of the
company secretary in South Africa. While the Act provides the legal foundation for the position,
King IV elevates the role of the company secretary by requiring the board to empower this
position with the necessary authority. By doing so, company secretaries are enabled to proactively transition from an administrative function to performing a vital role as governance
professionals.
In practice, this means that company secretaries must:
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Elevate Governance Expertise: The company secretary is empowered under King IV to
become a governance professional, focusing on strategic advisory roles rather than
solely administrative tasks. This shift enhances the oversight and governance functions
of the board.
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Implement Ethical Standards: The company secretary plays a crucial role in ensuring
that the company adheres to ethical standards and best practices, fostering a culture of
accountability and transparency within the organization.
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Support Risk Management: The company secretary is instrumental in supporting risk
management frameworks, ensuring that the board is informed of potential risks and
compliance issues that could affect the company’s operations.
What is a marketing director?
A marketing director is a senior-level position within a company that leads and
oversees all of the company’s marketing efforts from creative to opertations. This
may include developing year-long strategic plans, creating and executing
campaigns, managing budgets, and leading projects and staffers. Marketing
directors often have several years of experience in communications, marketing,
advertising, or a related field.
Responsibilities of a marketing director
A marketing job description can vary depending on the company size and industry,
but some common responsibilities include:
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Developing annual marketing strategies and plans
Creating or executing promotional campaigns
Managing the marketing budget
Overseeing marketing team members responsible for various segments or
projects (e.g., content, search engine optimization, advertising, email, branding,
PR, social media)
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Project management
Ensuring compliance with laws and regulations governing marketing efforts (e.g.
SPAM, GDPR, private customer information)
Skills needed to be a marketing director
Excellent communication and interpersonal skills. They need to develop
effective marketing campaigns and create content that is both engaging and
informative.
Strategic thinking and leadership to develop new ways to reach consumers and
grow the business.
Knowledge about current market trends.
How to leverage social media, search engine optimization, and other tactics to
promote a company’s products or services.
Work well under pressure, flexibility, and meet deadlines.
Successful marketing leaders will likely have a robust communications background
and familiarity with various aspects of traditional and digital marketing. They should
also be able to show their creativity and strategic planning skills. It’s also very
common to be asked to showcase a portfolio or discuss how they’ve successfully
driven results for past employers or clients.
Marketing director job description
The primary responsibility of a marketing director is often to develop and execute a
company’s marketing strategy. This can include creating and managing budgets,
ideating and implementing campaigns, overseeing market research, and
collaborating with various department within the company like sales or IT.
Marketing directors also often work with external partners such as advertising
agencies, PR firms, and web design studios.
Marketing director duties
The primary duty of a marketing director is to develop and execute successful
plans and campaigns that will achieve the organization’s desired results. They are
also responsible for creating brand awareness, driving customer acquisition and
retention, and increasing sales. Sometimes, they will part of a larger team
with marketing managers reporting to them or they may be the sole leader
responsible for a brand’s marketing efforts.
The Director of Finance plays a pivotal role in shaping a company’s financial strategy
and ensuring long-term stability. This leadership position involves overseeing
budgeting, forecasting, and investment planning to optimize financial performance.
By carefully analyzing market trends and economic risks, they help organizations
make informed decisions that drive growth.
Beyond managing financial operations, the Director of Finance also ensures
compliance with regulatory standards and implements policies to safeguard
company assets. They work closely with executives and stakeholders to align
financial goals, fostering a culture of transparency and accountability. Let's now
discuss the crucial roles and responsibilities of a Director of Finance.
What Does a Director of Finance Do?
A Director of Finance shapes an organization's financial strategy and ensures fiscal
health. They are responsible for developing and implementing financial strategies,
policies, and plans that align with the company's goals and objectives. By conducting
thorough financial analysis and forecasting, they provide valuable insights to inform
decision-making and guide the organization toward sustainable growth.
In strategic planning, Directors of Finance oversee the organization's financial
operations, including budgeting, financial reporting, and compliance. They ensure
that all financial practices adhere to statutory regulations and legislation, maintaining
the company's financial integrity. By managing budget and forecast processes, they
provide financial direction and assist in strategic decisions, ensuring the
organization's financial stability.
Leadership and team management are also crucial aspects of the Director of
Finance's role. They lead and mentor a team of finance and accounting
professionals, fostering a culture of continuous improvement and accountability. By
nurturing and maintaining good relationships with contractors, clients, and other
significant third parties, they support the organization's financial objectives and
enhance its market position.
According to the Bureau of Labor Statistics (BLS), employment of financial
managers, including Directors of Finance, is projected to grow 17% from 2023 to
2033, significantly outpacing the average for all occupations. With an estimated
75,100 financial manager job openings per year, many opportunities arise due to
workforce transitions, such as retirements and career shifts.
The 6 Critical Roles & Responsibilities of
Director of Finance
1. Financial Planning and Strategy
A Director of Finance is responsible for developing long-term financial strategies that
align with business goals and drive profitability. They analyze market trends,
company performance, and economic conditions to create financial plans that ensure
sustainable growth. By setting clear objectives and financial targets, they help
organizations stay competitive and financially stable.
They also collaborate with executive leadership to align financial strategies with
broader business initiatives. Their role involves forecasting potential risks, identifying
new revenue streams, and ensuring optimal resource allocation. By continuously
refining financial strategies, they support business expansion and long-term success.
2. Budgeting and Forecasting
The Director of Finance oversees the budgeting process, ensuring that all
departments operate within financial limits while meeting business objectives. They
develop comprehensive financial models that forecast revenue, expenses, and
profitability to guide strategic decision-making. By implementing accurate budgeting
processes, they help maintain financial stability and growth.
Regular forecasting allows them to adjust financial plans based on market trends
and company performance. They analyze past financial data, predict future
outcomes, and provide recommendations to optimize spending. Through detailed
financial oversight, they ensure that businesses remain agile and prepared for
economic fluctuations.
3. Risk Management and Compliance
Managing financial risk is a key responsibility of the Director of Finance, as they
identify potential threats that could impact company stability. They assess risks
related to investments, cash flow, and market conditions to implement proactive
mitigation strategies. By developing strong internal controls, they protect company
assets and ensure financial security.
Compliance is equally important, as it ensures the organization adheres to financial
regulations and reporting standards. They stay updated on tax laws, industry
regulations, and corporate governance policies to avoid legal penalties. By enforcing
strict compliance measures, they safeguard the company’s reputation and financial
integrity.
4. Financial Reporting and Analysis
A Director of Finance is accountable for producing accurate financial reports that
provide insights into company performance. They oversee the preparation of balance
sheets, income statements, and cash flow reports to ensure transparency. By
delivering detailed financial analysis, they support data-driven decision-making for
executives and stakeholders.
Beyond reporting, they analyze financial trends to identify areas for improvement and
cost-saving opportunities. They track key performance indicators (KPIs) and present
recommendations that enhance financial efficiency. Through consistent monitoring
and reporting, they help businesses achieve financial health and operational
success.
5. Cash Flow Management
Maintaining a healthy cash flow is essential for business stability, and the Director of
Finance ensures there are sufficient funds for daily operations. They monitor cash
inflows and outflows, optimizing working capital to prevent liquidity issues. By
managing receivables, payables, and investments efficiently, they ensure smooth
financial operations.
They also implement strategies to improve cash flow, such as renegotiating supplier
terms or optimizing debt management. By forecasting cash flow trends, they help
prevent shortfalls and ensure financial agility. Effective cash flow management
allows companies to invest in growth opportunities while maintaining financial
stability.
6. Business Growth and Innovation
The Director of Finance plays a key role in driving business growth by identifying
new financial opportunities. They assess potential markets, investment trends, and
revenue streams to expand company operations. By leveraging financial insights,
they help businesses capitalize on emerging opportunities.
Innovation in finance is also essential, and they implement new financial
technologies and automation tools to improve efficiency. They explore digital
payment systems, AI-driven analytics, and process automation to enhance financial
operations. By integrating innovative solutions, they ensure businesses stay ahead
in a competitive market.
What Does an IT Director Do?
An IT Director, also known as an Information Technology Director,
oversees the technological needs of an organization.
This includes managing and implementing IT strategies, software
systems, and infrastructure that align with the organization’s goals and
objectives.
IT Directors often work closely with other members of the executive
team to plan and execute strategies that optimize company
performance.
They may also coordinate with other departments to identify their
technical needs and provide appropriate solutions.
Their role typically involves supervising and leading the IT department,
which includes hiring, training, and evaluating IT staff.
IT Directors are also responsible for managing the department’s budget
and ensuring that all operations are cost-effective. They ensure the
security of data, network access, and backup systems, and they must stay
up-to-date with current technologies and trends, as well as laws and
regulations regarding data protection. Moreover, IT Directors often act
as a liaison between the organization and its stakeholders, vendors, or
third-party providers. They maintain professional and technical
knowledge by attending educational workshops, reviewing professional
publications, and participating in professional societies.
FOUNDER OF PICK N PAY
Jack Goldin, Died 2001
Raymond Ackerman bought Pick n Pay on March 01st 1967. In his own words,
“10% capital and 90% guts” is what it took for Raymond Ackerman to start
Pick and Pay on this day in 1967.
COMPANY PERSPECTIVES
OUR MISSION: We serve. With our hearts we create a great place to
be. With our minds we create an excellent place to shop. OUR VALUES:
We are passionate about our customers and will fight for their rights. We
care for, and respect each other. We foster personal growth and
opportunity. We nurture leadership and vision, and reward innovation.
We live by honesty and integrity. We support and participate in our
communities. We take individual responsibility. We are all accountable.
Values Instilled by Raymond Ackerman at Pick
N Pay
Raymond Ackerman, the founder of Pick N Pay, instilled several core values that
continue to resonate within the company today. These values have shaped the
company's culture and operational philosophy. Here are some of the key values:
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Customer Focus: Ackerman emphasized the importance of putting
customers first. This customer-centric approach became the cornerstone of
Pick N Pay's success, as Ackerman believed that treating the customer like a
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queen would ensure their loyalty and satisfaction. This philosophy is evident
in Pick N Pay's ongoing commitment to consumer advocacy, such as their
efforts to deregulate the petrol retail sector to benefit consumers. 1
Integrity: Maintaining honesty and transparency in all dealings was a
cornerstone of Ackerman's philosophy. This value fosters trust between the
company and its stakeholders. Ackerman's commitment to integrity is
reflected in Pick N Pay's adherence to fair trade practices and corporate
governance standards, which have set benchmarks in South Africa. 2
Innovation: Ackerman encouraged a culture of innovation, pushing for new
ideas and improvements in service and product offerings. He pioneered the
concept of hypermarkets in South Africa, revolutionizing the retail industry by
offering a wide range of products at competitive prices. 3 This commitment to
innovation remains vital in adapting to market changes.
Community Engagement: Ackerman believed in giving back to the
community. Pick N Pay continues to support local initiatives and charitable
causes, reinforcing its commitment to social responsibility. The company
invests in education, literacy programs, and various community projects,
reflecting Ackerman's belief that businesses have a responsibility to contribute
to society. 4
Sustainability: A focus on sustainable practices was part of Ackerman's
vision. Today, Pick N Pay actively works towards reducing its environmental
impact and promoting sustainable sourcing. The company's initiatives, such
as the Pick N Pay School Club project, demonstrate their commitment to
sustainability and environmental responsibility. 5
Employee Empowerment: Ackerman valued the contributions of employees
and believed in empowering them. This value is reflected in the company's
efforts to create a supportive work environment, offering training and
development opportunities to foster personal growth and leadership.
Conclusion
The values instilled by Raymond Ackerman have laid a strong foundation for Pick N
Pay, ensuring that the company remains customer-centric, innovative, and socially
responsible. These principles continue to guide the organization in its operations and
strategic decisions today, maintaining Ackerman's legacy of excellence and integrity.
Impact of Raymond Ackerman's Death on Pick
N Pay
Raymond Ackerman, as a prominent figure in the retail industry and the founder of
Pick N Pay, has had a significant influence on the brand's identity and operations.
His passing could have several implications for the company.
Brand Impact
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Legacy of Innovation: Ackerman was known for pioneering customer-centric retail
strategies, such as the introduction of the Pick N Pay No Name brand, which offered
everyday essentials at competitive prices without compromising on quality. This
initiative set new standards in food and grocery retail and made a significant impact
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on the lives of millions of South Africans. 1 His death may lead to concerns about the
continuity of this innovative spirit.
Public Perception: The emotional connection many customers have with Ackerman
could affect their loyalty to the brand. A strong tribute or acknowledgment of his
contributions may help mitigate negative sentiments. Ackerman's commitment to
consumer rights and his role in the establishment of the Consumer Protection Act in
South Africa further solidified his legacy as a consumer champion. 1
Leadership Transition: The effectiveness of the leadership transition will be crucial.
If the new leadership can uphold Ackerman's values, it may strengthen the brand's
reputation. The return of former CEO Sean Summers to lead the company through its
current challenges is a strategic move to ensure continuity and stability. 1
Legacy Considerations
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Cultural Influence: Ackerman's vision shaped Pick N Pay's corporate culture. His
death may prompt a reevaluation of the company's mission and values. His belief
that "doing good is good business" was evident in numerous social initiatives,
including the establishment of the Raymond Ackerman Academy of Entrepreneurial
Development, which empowers young people with the skills and knowledge to start
their own businesses. 1
Philanthropic Initiatives: Ackerman was involved in various charitable activities.
The continuation of these initiatives will be important for maintaining the company's
legacy in social responsibility. The Ackerman Pick N Pay Foundation focuses on
enhancing and developing skills, and supporting projects that encourage
entrepreneurship, self-reliance, and provide employment opportunities. 1
Investor Confidence
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Market Reactions: Investors may initially react negatively to the news, leading to
fluctuations in stock prices. The long-term impact will depend on how the company
manages the transition. The Board's decision to undertake a R4 billion Rights Offer,
supported by the Ackerman family, is a strategic move to reinvest in the company
and reduce debt, which may help stabilize investor confidence. 1
Strategic Direction: Investors will be keen to see if the new leadership can maintain
or enhance the company's strategic direction. Clear communication about future
plans will be essential. The company's commitment to a turnaround strategy,
including the listing of its Boxer business, is a step towards ensuring long-term
growth and stability. 1
Financial Performance: If the company can demonstrate stability and growth postAckerman, it may restore investor confidence over time. The success of the Boxer,
Pick N Pay Clothing, and online services businesses provides a strong foundation for
the recovery of the overall business. 1
Conclusion
The death of Rayman Ackerman could have profound effects on Pick N Pay's brand,
legacy, and investor confidence. The company's response to this transition will be
critical in shaping its future trajectory. By honoring Ackerman's legacy and ensuring a
smooth leadership transition, Pick N Pay can navigate this challenging period
effectively. The commitment of the Ackerman family to the company's foundational
values and their support for the current management team is crucial for the
company's future success.
Impact of Share Price Changes on Investor
Confidence
Share price changes can significantly influence investor confidence in various ways.
Here are some key points to consider:
Positive Impacts
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Increased Confidence: When share prices rise, it often signals strong
company performance or positive market conditions, leading to increased
investor confidence. This is often associated with a bull market, where stock
prices are rising and investor confidence is growing, typically tied to economic
recovery or an economic boom, as well as investor optimism. 1
Attracting New Investors: A rising share price can attract new investors who
perceive the stock as a good investment opportunity, further driving up
demand and prices. This can be particularly true when positive news releases
on earnings, profits, or future estimated earnings are announced. 1
Market Sentiment: Positive price movements can enhance overall market
sentiment, encouraging more trading activity and investment. Investor
sentiment or confidence can cause the market to go up, which can cause
stock prices to rise. 1
Negative Impacts
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Decreased Confidence: A decline in share prices can lead to a loss of
confidence among investors, as it may indicate underlying issues within the
company or the market. This is often seen in a bear market, where stock
prices are falling and investor confidence is fading, typically occurring when
an economy is in recession and unemployment is high. 1
Panic Selling: Falling prices can trigger panic selling, where investors rush to
sell their shares to avoid further losses, exacerbating the decline.
Long-term Perception: Sustained decreases in share prices can alter longterm perceptions of a company’s stability and growth potential, leading to a
more cautious investment approach.
Factors Influencing Investor Confidence
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Market Trends: Broader market trends can impact individual share prices
and, consequently, investor confidence. For instance, industry performance
can cause the stock price of companies in the same industry to move in
tandem with each other. 1
Company News: Announcements regarding earnings, management changes,
or strategic shifts can lead to immediate price changes and affect investor
sentiment. Factors such as news releases on earnings, profits, and future
estimated earnings can significantly impact share prices. 1
Economic Indicators: Economic conditions, such as interest rates and
inflation, can also influence share prices and investor confidence. For
example, changes in interest rates by central banks can affect the cost of debt
for companies, influencing their stock prices. 1
Conclusion
In summary, share price changes play a crucial role in shaping investor confidence.
While rising prices can boost confidence and attract investment, falling prices can
lead to uncertainty and panic. Understanding these dynamics is essential for
investors to navigate the market effectively.
Pick n Pay has posted a significant loss for the six months ended 27 August 2023
(H1 FY24), as the group’s key core supermarket business takes a severe hit.
“The group delivered a disappointing result in a period heavily impacted by load
shedding and increased competitive intensity,” the group said.
“The R396 million spent on diesel to run generators and keep stores open not only
impacted expense growth but also constrained Pick n Pay’s ability to respond to
increased promotional activity in the market.”
Although group turnover increased by 5.4%, with Boxer seeing a 16.1% increase,
the gross profit margin
lowered by 0.9% to 18.5%, while gross profit in rand terms increased by 0.4% y/y.
Trading expenses grew by 13.7% due to the increased energy costs and employee
restructuring.
Trading profit dropped to R31.8 million from R1.2 billion in H1 FY23, with the R565.0
million incremental abnormal costs taking their toll.
This included R259.0 million in employee restructuring costs, R190.0 million in net
incremental energy costs, and R116.0 million in duplicated supply chain costs from
the Eastport distribution centre transition.
Additionally, profit before tax was impacted by a 47.3% increase in net finance
charges, resulting in a pro forma loss before tax and capital items of R837.2
million.
Overall, the group’s headline earnings per share (HEPS) dropped 241.5% from
a profit of 97.73 cents per share in H1 FY 23 to a loss of 138.24 cents per share
in H1 FY24.
Amidst this challenging period, the group elected not to declare an interim dividend.
Name
Ackerman Family
19.67 %
Mandg Investment Managers Pty Ltd.
10.16 %
Allan Gray (Pty) Ltd.
7.874 %
Sanlam Investment Management (Pty) Ltd.
Equities%Valuation
Name
Equities%Valuation
1.752 %
Gareth Ackerman
0.7493 %
Pick 'n Pay Stores Ltd.
0.6955 %
Pick 'n Pay Employee Share Purchase
0.6022 %
M&G Investment Managers (Pty) Ltd.
0.4331 %
Abax Investments (Pty) Ltd.
0.3017 %
Jonathan Ackerman
0.1559 %
The Companies Act of South Africa and the rights and
responsibilities of shareholders – some aspects
explained
Section 7
The Companies Act of South Africa (Act 71 of 2008), hereafter referred to as the
Act, mentions in section 7 that one of the Act’s purposes is ‘to balance the rights
and obligations of shareholders and directors within companies.’
Definition of a shareholder
The Act, defines a shareholder as ‘the holder of a share issued by a
company[1] and who is entered as such in the certificated or uncertificated
securities register, as the case may be.’
Furthermore, the Act states in section 57 (1) that in the part about the governance
of companies, ‘a shareholder means a person who is entitled to exercise any voting
rights in relation to a company, irrespective of the form, title or nature of the
securities to which those voting rights are attached.’
Section 15
Section 15 (6) of the Act states that a company’s Memorandum of Incorporation
(MOI) and any rules of the company are binding:
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‘between the company and each shareholder’, and
between or among the shareholders of the company.’
In addition, section 15 (7) spells out that shareholders of a company are allowed to
‘enter into any agreement with one another concerning any matter relating to the
company.’ However, such an agreement must be consistent with the Act and the
company’s MOI.
Furthermore, if any provision of such an agreement is inconsistent with the Act or
the company’s MOI, it ‘is void to the extent of the inconsistency.’
Section 16
Section 16 (1) specifies that shareholders may amend the Memorandum of
Incorporation of a company under certain circumstances.
The amendment is performed by special resolution by ‘shareholders entitled to
exercise at least 10% of the voting rights that may be exercised on such a
resolution.’
Section 19
Section 19 (2) of the Act explains that the sole reason of being a shareholder of a
company does not make a shareholder ‘liable for any liabilities of the company,
except to the extent that this Act or the company’s Memorandum of Incorporation
provides otherwise.’
Section 20
According to section 20 (6), each shareholder has the right to claim for
damages ‘against any person who fraudulently or due to gross
negligence causes the company to do anything inconsistent with:
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this Act, or
a limitation, restriction or qualification contemplated’ in section 20 concerning
the validity of company actions, ‘unless that action has been ratified by
the shareholders’ by special resolution.’
Importance of Disclosing Shareholding
Information
Disclosing shareholding information in financial statements is crucial for several
reasons:
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Transparency: It promotes transparency in the company's operations,
allowing stakeholders to understand who owns the company and how
ownership is distributed. Comprehensive and proactive disclosures are central
to the new concept of transparency, which imposes responsibilities on
corporations to report the truth to every stakeholder group. This transparency
is essential for maintaining confidence in the operation of markets and
ensuring access to capital financing. 1
Investor Confidence: Clear disclosure can enhance investor confidence, as
potential and current investors can assess the stability and control of the
company. The greater the extent of transparency and disclosure, the greater
the level of confidence in the operation of markets.
Regulatory Compliance: Many jurisdictions require companies to disclose
shareholding information to comply with legal and regulatory standards,
ensuring accountability. Companies should disclose relevant and material
information concerning themselves on a timely basis, meeting market
guidelines to allow investors to make informed decisions. 2
Risk Assessment: Investors and analysts can better evaluate risks
associated with concentrated ownership or potential conflicts of interest. The
lack of financial disclosure and inadequate governance practices have been
linked to financial crises, highlighting the importance of transparency for risk
assessment.
Market Perception: Shareholding patterns can influence market perception
and stock prices. For example, significant insider ownership may signal
confidence in the company's future.
Corporate Governance: It aids in assessing the effectiveness of corporate
governance practices, as ownership structure can impact decision-making
processes. Shareholders should have the right to participate in key corporate
governance decisions, such as nominating, appointing, and removing
directors, which underscores the importance of disclosing shareholding
information.
Key Elements of Shareholding Disclosure
When companies disclose shareholding information, they typically include:
Element
Description
Major Shareholders
Identification of individuals or entities owning significant
stakes.
Ownership Percentage
The percentage of shares held by major shareholders.
Element
Description
Changes in Ownership
Any significant changes in shareholding over the reporting
period.
Related Party
Transactions
Disclosure of transactions with major shareholders.
In summary, disclosing shareholding information is essential for fostering trust,
ensuring compliance, and providing valuable insights into a company's
governance and financial health. This disclosure allows investors to make
informed judgments on the risks and rewards of any investment, thereby
enhancing market confidence and stability.
Benefits of listing your company on
stock exchange
The main benefit a company enjoys when listed in the stock exchange is that it enhances
its brand name and thereby it adds value to the company. As well it can add value by
implementing an employee share holding scheme. In this manner a company can add
value as opposed to a private limited company not listed in the stock exchange.
The other advantage is that it can issue new shares to the public or issue rights issues to
existing share holders as opposed to a company not listed in the stock exchange
because private companies not listed in the stock exchange cannot issue shares to the
public at large. In addition, a company listed in the stock exchange has access to a
variety of share holders. For example it can attract institutional investors or some foreign
investors. This enables the company to embark on expansion of the company’s activities
and grow in the future.
In addition to the above as a company when listed in the stock exchange also has a
benefit because its shares can be priced because it can be traded in the stock exchange
and has a price signal as opposed to a private company not listed in the stock exchange.
As well a company listed in the stock exchange can access more capital with minimal
cost compared to a private company not listed in the stock exchange.
Drawbacks
While there are benefits to going public, it also means additional obligations and
reporting requirements on the companies and its directors:
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Increasing accountability to public shareholders
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Need to maintain dividend and profit growth trends
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Becoming more vulnerable to an unwelcome takeover
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Need to observe and adhere strictly to the rules and regulations by governing
bodies
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Increasing costs in complying with higher level of reporting requirements
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Relinquishing some control of the company following the public offering
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Suffering a loss of privacy as a result of media interest
As the owner or major shareholder of a private company, it is important to outweigh the
benefits and costs of listing in the light of the plans and goals that have been set for the
company. Discussions with lawyers, independent accountants and other professional
advisors will also provide you with better considerations.
The JSE lists approximately 400 companies on its Main Board and AltX and is well known
for its world-class regulation, its access to deep pools of capital and the high
participation of foreign investors. Today, the JSE is one of the top 20 stock exchanges in
terms of market capitalisation and considered to be a gateway to investing in quality
listed African companies.