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Corporate governance code complete, but...

Lesotho Institute of Directors (IoD) - Lehlohonolo Chefa

July 10, 2020 3 min read

MASERU – The Coronavirus pandemic has interrupted proceedings of the Lesotho Institute of Directors (IoD) towards the implementation of the first ever Corporate Governance Code in the country.The institute says it has completed all the processes leading towards the implementation of the code, now what is left is the official launch

“We are done with the final editing and design stages of the code and I will wait to hear from the rest of the team with regard to the way forward. “But due to the magnitude of the project, we wanted to stage a big event to launch it but now the Covid-19 pandemic is making things difficult for us. That is the only thing that is left for us,” said the Chief Executive Officer of the Lesotho Institute of Directors (IoD) Lehlohonolo Chefa in an interview with Metro news on Tuesday.  

With the threat posed by the virus, Chefa said they have to explore and come up with the best way to finally launch the project. He stated that they would have loved to invite as many people as possible considering the nature of the project. 

Dubbed the “Mohlomi Code” the first ever Corporate Governance Code in the country is expected to go a long way towards transforming the manner in which corporations and organisations operate in Lesotho. It is expected to be applicable across the board, from state owned enterprises, private companies, academic institutions, non-governmental organisations as well as many other institutions. 

It was developed by people who know and understand the challenges of doing business in the country’s economy and was done in a manner that will take into consideration the norms and values that exist in Lesotho’s economy. The Lesotho Institute of Directors was established back in 2004 to act as custodian of corporate governance in Lesotho. 

The development of the “Mohlomi Code” was funded by the African Development Bank (AfDB) with the initial financial assistance to the tune of M900 000 to kick start the project. An additional funding was made available in the next phases of the project.

Chefa has, however stated that while the development of the Mohlomi code was funded by the AfDB, the Institute of Directors may need additional financial support with the way it is growing and gaining momentum. That funding he said may also come from the new members joining in.

“The institute is not struggling financially but it may need an additional support going forward as it grows. The institution also operates from the new membership fees and that may play a huge financial role going forward,” said the chairman of the board of the Institute of Directors, Lejone Mpotjoane in an interview with Metro news on Tuesday. 

The project went through several stages that include drafting which was funded with close to M1 million. From the drafting stage it went through the validation process as well as the professional editing and design stages. 

Lesotho was among very few countries without their own corporate governance code. Many countries have long established that the best way of improving corporate governance culture was to develop their own codes.

 


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Botswana, Malawi, Namibia, South Africa, Zambia and Zimbabwe are some of the SADC countries that already have corporate governance codes. Absence of corporate governance code in Lesotho has over the years resulted in the abuse of power by people who were entrusted to run State Owned Enterprises (SOEs) particularly, and in some cases such businesses ended up being privatised or closing shop due to poor corporate governance. Where corporate governance is weak like Lesotho, it is similarly difficult to protect the interests of stakeholders, this was one of the worthy statements acknowledged in the building stages of the Mohlomi Code. 

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