CIS INTERNATIONAL QUALIFYING BOARD

EXAMINATION

GENERAL
Candidates were ill prepared to attempt an examination on board level. The standard of the answers, as well as the
use of language, is unacceptable on this level.
Company secretaries are, on a daily basis, required to analyse facts, apply the law (which they should know) and
regulations, apply rules of standard practise and make well considered recommendations.
Candidates exhibit a lack of analytical ability, a lack of basic legal knowledge, a lack of drafting skills and a lack of
insight.
The answers often veered off into stock standard answers with little or no connection to the question itself,
indicating that candidates still do not read questions and analyse facts. They simply provide a parroted version of
the material. At board level, as in practise, rote learning and a lack of analytical skill is fatal.
Candidates also do not have detailed knowledge to provide detailed answers and recommendations. Most candidates
do not even provide a recommendation when required to do so.
COMMENTS ON SPECIFIC QUESTIONS
Question 1
This question required candidates to draft a check list for use in determining whether a person may SIGN a transfer
form on behalf of a PRINCIPAL. It was not a popular question, although this situation presents itself in a transfer
secretarys office on a daily basis.
Candidates discussed procedures, brokers forms, the issue of certificates, the contents of a share register and the
like. Many simply repeated a section in the material dealing with the process of transfer verbatim. Very few even
attempted to identify possible PRINCIPALS and even fewer discussed what must be furnished in order to validly
SIGN a transfer form.
The answers indicate three of the biggest problems experienced in Board examinations:
1. Candidates do not read and analyse a question;
2. Rote learning; and
3. A lack of underlying legal knowledge.
The note made by the examiner reads as follows: This is a practical application of Corporate Law principles as they
apply to transfer secretaries.
Candidates simply do not know the law. At board level, they are expected to know the law.
Question 2
This was not a very popular question. It combined simple (easy) minute-drafting skills with an understanding of the
legislative changes regarding loans (difficult).

Some of the candidates who elected to attempt this question obviously knew the extent of the changes in the
legislation and did reasonably well. It is a pity that they concentrated on one or the other of the components of the
question and did not attend to both.
Question 3
This question was very poorly answered. It required a discussion of the general requirements concerning the
convening and notice for a private meeting and a simple application of the principles to the stated case.
The question asked for general principles regarding private meetings. Candidates obviously do not understand the
difference between private and public meetings and are, it seems, of the opinion that all private meetings are
company meetings.
Candidates discussed the constitution of meetings, the removal of directors by the General Meeting, special
resolutions and general principles of good governance. Candidates did not read the question. If they did, they
completely misunderstood the difference between convening of a meeting and the constitution of a meeting and, to
make matters worse, they did not understand the difference between the suspension of an employee and the removal
of a director.
Candidates do not know the difference between a board meeting and a General Meeting and want a board to pass
special resolutions. This matter was not addressed in the question, but bears mention as the majority of candidates
went off on this tangent.
The facts of the case were broadcast in the media and analysed at length in the business pages of the newspapers. A
reasonably well informed candidate would have known the facts and the reasons for the judgment. If they did not,
and it was not required, the principles of the Law of Meetings, amply discussed in the tuition material, were
confirmed by the court.
Question 4
This was a difficult question in the sense that it required the candidate to compress a large amount of information
into a letter. The unfortunate tendency was, again, that students have a vague notion of the material, but not enough
knowledge to furnish detail and very little clarity of thinking.
This specific aspect of the material was examined for the first time in this paper (as far as I can ascertain) and it was
patently obvious that candidates did not study this. It points to spotting in exam preparation.
Candidates did not do well at all. Again, they did not do what the question required i.e. an explanation of what
STRATE is, what dematerialisation is, who participants are and to whom the request for dematerialisation should be
addressed.

Question 5
Question 5 was a popular choice. However, the answers to this easy question illustrate the general lack of proper
preparation by students.
1
The question asked for legal requirements candidates furnished duties;
2
The question required a report many candidates furnished memoranda (and were not penalised) and the
few reports lacked structure and clarity;
3
The question asked for the process BEFORE an appointment candidates furnished information relating to
the period SUBSEQUENT to an appointment;
4
The question required a small bit of insight candidates took the bit and galloped in the wrong direction,
quoting the (wrong) material almost verbatim; and
5
The question required detail candidates furnished woolly arguments and, generally, did not furnish the
recommendations required.
The answers show:
1
Rote learning or, in the alternative, little or no concentrated study (the very antithesis to company
secretaryship);
2
An inability to structure and draft documents (a company secretarys bread and butter);
3
An inability to analyse a question and poor comprehension skills (fatal in practise); and
4
Atrocious use of language (the tool company secretaries use every day).
This examiner, not being English speaking, does not penalise candidates for not being able to express themselves
clearly in a second language. Even so, the standard of use of English is, simply put, unacceptable.
The question also dealt with the core requirements for the appointment of a COMPANY SECRETARY. Candidates
are studying in order to become company secretaries and they should know the requirements for appointment in
their own chosen profession.
Question 6
This was a simple question requiring of candidates to draft a comprehensive agenda for the first board meeting of a
private company.
It was, again, clear that candidates are confused as to the differences between board meetings and General Meetings.
Many wanted special resolutions to be passed, proxy rules to be agreed upon etc. Again, candidates did not read the
question and discussed listing on the JSE, the appointment of audit committees etc.
Many candidates drafted hybrid documents comprising elements of both agendas and minutes. The latter
candidates were not penalised, but the trend is of concern. Board candidates should know better. They should also
know that jotting down a few diverse facts will not satisfy the requirements for 20 marks. Detail, again, lacked.

Given the simple question, the results were extremely disappointing as the tuition material contains a comprehensive
example.
Question 7
This was a popular question as it looked easy. It was easy provided the candidate read the stated case and did not
go off at a tangent.
The question pointed the candidate in the right direction: deemed NOT to be a juristic person and venture of the
defendants personally etc. Very few candidates stated that gross abuse of separate legal existence is one of the
grounds required by the question even though it was given away in the question itself.
Part 2 of the answer was also spoon-fed to the candidates: selling off assets and changing the business and
30% and without input.
Candidates simply did not make the connections and rattled off stock answers.
Candidates lack of basic legal knowledge is of concern. Personal liability for members/directors in the
circumstances of the stated case is trite law. One disturbing fact is that the members of a CC are referred to as
directors and shareholders and that many candidates referred to the company. The indiscriminate use of the
word corporation is also of concern.
The answers to this question also illustrate the difference between a non-English speaking candidate and an
unprepared candidate. An examiner cannot award marks for ... allowing a CC to engage in unlawful trade ... when
the reference is to reckless or negligent action with intent to defraud. An examiner can also not award marks for a
statement that the member of the CC has a rights because he holds 30% of the members interest.
A candidates mother tongue not being English does not make a wrong answer right.
The stated case also attracted attention in the media and the business pages of the newspapers and, as with the case
supra, confirmed general principles.

END OF REPORT