Case Study – My Driver is my Director
My Driver is my Director
Some weeks back we received a call from a small company wanting help with their BEE activities.
The manager explained that they have two directors, one white and one black. She then proceeded to explain that the black director works in the company as a driver.
I immediately suspected that the company is fronting and asked the following questions:
Is the driver capable of being a director?
Does he know his fiduciary duties associated with being a director?
Does he even know he is a director?
Has he attended directors meetings and does he have full voting rights?
Is he earning roughly the same salary as his co director?
Does he have the same benefits: office, car as his fellow director?
Has he been given the authority that goes with being a director?
How any anyone issue instructions to the driver when he is their director?
This action by the comapny is potentially very dangerous. If they are fronting they can be blacklisted. The driver-director can/should ensure he is treated as a director and if not, the company can be taken to the CCMA, and can suffer severe penalties.
Basically it is not worthwhile appointing a director just for the BEE points.