The new rules mean a prosecutor will no longer have to demonstrate that a senior individual who was the ‘directing mind and will’ of the company was involved in an alleged wrongdoing. Instead, directors will be held criminally liable for simply failing to prevent fraud committed by a staff member.

Vincent Billings, partner at SA Law, said: ‘The new Act seeks to discourage organisations from turning a blind eye to fraud. While technically individuals (including directors) cannot be prosecuted under the new law, it is still a source of anxiety for company directors because ultimately, the responsibility to prevent fraud from happening within their organisation lies in their hands.

‘In order to avoid prosecution and an unlimited fine for the organisation, directors will need to ensure reasonable procedures are in place to prevent fraud from occurring - otherwise they could someday find themselves in a position where they’ve failed to comply with the law.’

The