Business
Responsibilities of a company director
Published
5 years agoon
By
The Post
Everyone aspires to be a director of a company. This is a noble aspiration. It may be that you have been appointed a company director of a company to be listed on the stock exchange. Congratulations! But before you rejoice you need to appreciate the duties and responsibilities that are expected of you. Over the last 20 years, we have witnessed a growing number of memorable corporate collapses which in many instances have been directly attributable to the behaviour of directors.
These collapses have invariably caused financial grief to workers, investors, suppliers and customers alike. Such tragic events have caused public outcry for more accountability from company directors and this has pushed governments to arm company regulatory bodies with ever-increasing powers to enforce corporate governance.
Being appointed as a director of a company, whether the business entity is large or small, you have now taken on a number of significant legal duties associated with being a director which can land you being fined or being charged with criminal conduct if you behave wrongly.
There are statutory duties that are expected of each director of a company.
A director must act within the powers enshrined under the company’s constitution. The most important part of the company’s constitution is the articles of association which has an important set of rules for your company and for your board.
In most jurisdictions when you register a company, you may use the model articles of association available for new companies or alternatively, you may have to draw up your own tailored articles normally with the help of a legal advisor.
Therefore as a director it’s imperative that you familiarise yourself with the articles of association as they may constrain your decision-making powers in certain ways. If you exceed your powers, then related decisions could be reversed and you might even have to compensate the company for any resulting financial losses.
The other duty of a company director is that of promoting the success of the company. As a director you must act in a way that is considered to be in good faith, and this would be most likely to promote the success of the company for the benefit of its members or shareholders as a whole including minority shareholders.
When making decisions, directors must not only consider owners of the company but must also consider the likely consequences of their decision to various stakeholders, which include employees, suppliers, customers and the community. It’s very important that they also consider the impact of their decisions, in the long term, on the environment and on the reputation of the company.
The duty to promote the success of the company brings with it a number of implications. The directors decisions will now only have to be justified on the basis that they are for the best interests of the company, not on the basis of what works best for certain executives or shareholders.
Directors should be broad minded in the way they evaluate those interests by taking cognisance of the interests of other stakeholders rather than embracing a narrow financial perspective that is good for shareholders only.
The third major duty requires directors to exercise independent judgement. Directors are meant to develop their own informed view on the company’s activities. They should not simply implement the directives of other parties such as major shareholders.
It is the directors’ responsibility to make independent decisions by relying on the knowledge or judgement of other directors or experts. A director needs to form his/her own view before making or supporting a board decision. This will require some effort on the part of the director to be familiar with key aspects of the company’s activities.
The other major duty is that of exercising reasonable care, skill and diligence. Gone are the days when directors could be appointed purely for their name or reputation without the expectation that they would actually do any work as board members. Directors are now expected to exercise reasonable care, skill and diligence in their role.
The exercising of reasonable care, skill and diligence is measured on the basis of what a reasonably diligent person with the same general knowledge, skill and experience would be expected to do. If you are a director and you also possess specific professional training or skills, such as a lawyer or accountant, then you will be held to a higher standard in related issues than less qualified board members.
The last legal duty relates to the need for directors to avoid or manage conflicts of interest which may affect their objectivity. There are certain instances when the directors’ decision might be affected by conflicts of interest. If such situations arise, it is essential that a director discloses this to fellow board members.
It will then be up to the other non-conflicted board members to decide how to manage or approve the conflict and therefore maintain the integrity of the board’s decision-making process.
Conflicts of interest usually arise in situations where the director has relationships of a business or personal nature with persons or entities that are affected by the company’s activities or it might be in situations where the director may be considering taking advantage, on a personal basis, of property, information or opportunity which belongs to the company.
Receiving gifts or benefits from third parties could also be a potential threat to a director’s objectivity. It is therefore very important that as a director you observe your statutory duty to disclose any direct or indirect interest in proposed or existing transactions or arrangements with the company.
The Board of Directors should ensure that a record of the meetings is kept as proof that they have fulfilled these legal duties. The minutes of board meetings will provide a record of the board’s decision-making process.
By law, these minutes must be kept for a certain number of years. If you have no record of your meetings proceedings then it may be difficult for you to remember if you fulfilled your directors’ duties in respect of some key decision, but however if you have a record then the minutes can provide that vital evidence of the decision making process.
- Stewart Jakarasi is a business and financial strategist and a lecturer in business strategy, advanced performance management and entrepreneurship.
He is the Managing Consultant of Shekina Consulting (Pty) Ltd and provides advisory and guidance on leadership, strategy and execution, corporate governance, preparation of business plans, tender documents and on how to build and sustain high-performing organisations.
For assistance in implementing some of the concepts discussed in these articles or in facilitating workshops or seminars please contact him on the following contacts: sjakarasi@gmail.com, call on +266 58881062 or WhatsApp +266 62110062 .
Stewart Jakarasi
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All set for Lesotho Tourism Festival
Published
2 weeks agoon
November 28, 2023By
The Post
STANDARD Lesotho Bank, in collaboration with Alliance Insurance, on Tuesday launched Lesotho Tourism Festival (LETOFE) Lifestyle Experience.
The launch was meant to lighten up the festive mood in preparation for the LETOFE event to be held in Thaba-Bosiu on December 23.
LETOFE is an annual event that takes place at the Thaba-Bosiu Cultural Village, which has since been transformed from a mere jazz affair to a lifestyle event.
Speaking at the launch, Standard Lesotho Bank CEO Anton Nicolaisen said he was pleased to launch the LETOFE lifestyle experience.
“This festival is arguably one of the biggest music festivals that Lesotho holds and we are pleased to continue as the headline sponsor of this event that brings moments of jubilation and friendship,” Nicolaisen said.
He said since the arts industry should be guarded jealously, the bank will continue bringing joy to Basotho as a means to promote artistes.
“As patron of arts, we have jealously guarded the creative industry. The SLB is still here to promote the arts and bring happiness to Basotho,” he said.
He said the bank has been sponsoring the festival for the past 18 years.
“We are now 18 years on the trot and I am proud that we have been a significant contributor to the growth of this festival.”
He said this festival has grown in leaps and bounds to become one of the biggest features of their entertainment calendar during the festive season, attracting multitudes within Lesotho, Basotho in diaspora and tourists from neighbouring countries.
“We have benchmarked on the successes of these festivals and we will improve our offering every year to the level of a full lifestyle event.”
He said the event is a way of acknowledging the talent that Basotho have as well as the avenue for cross-fertilization of local artists to experience and present their craft.
He added that the bank had made an arrangement for their customers to enjoy a six percent discount when they buy festival tickets using Standard Lesotho Bank cards at any Computicket in Lesotho or other countries.
The promoter of the LETOFE Lifestyle event said they are transforming the event from a jazz festival to a lifestyle event.
“We are introducing young stars to the concepts hence our event is composed of the upcoming stars.”
The co-sponsor from Alliance Insurance, ’Makearabetsoe Mabaleha, said as sponsors they sponsor the LETOFE Lifestyle experience because they are also benefiting from the event.
“Our benefaction is seeing the event creating jobs for Basotho and attracting foreigners in order to improve the economy,” Mabaleha said.
Alice Samuel
Business
Joang locked in rentals row with tenants
Published
2 weeks agoon
November 28, 2023By
The Post
FORMER Home Affairs Minister Joang Molapo is in a nasty fight with tenants over rentals at a shopping complex in Maputsoe which he is managing.
The main tenant, Ha Seotsanyana managed by Jaan Mahomad Suleman, says Molapo does not have authority to demand monthly rentals from him as he does not legally represent the company owning the property.
The property belongs to Litjotjela Mall (Pty) Ltd. The owners of the mall are however locked in a fight for its control.
In April this year, the High Court issued an order giving Molapo power to manage the mall pending finalisation of the case.
The tenants have however refused to pay rentals to Molapo. Molapo then filed an urgent application in the Northern Region High Court seeking intervention.
The Deputy Sheriff Mpho Maphiri padlocked the shopping complex last week executing an order sought by Molapo in the property dispute.
Molapo, who is a former deputy leader of the Basotho National Party (BNP), claims that the tenants owed him rentals for 10 years.
He has sought to terminate the sublease agreement entered between the company and the tenants.
The High Court’s deputy sheriff closed down the shops on Monday last week amid resistance by the tenants. The police told the tenants that they would be arrested for contempt of court if they continued to resist the order.
Six businesses trading there were closed.
However, before the end of the day, Maphiri was sent back to open the pharmacy under condition that the owner was still paying directly to Molapo and did not owe any rentals.
Suleman told thepost that his company, Barakah (Pty) Ltd trading as Ha Seotsanyana, was in agreement with Molapo to use the property but “we are surprised to find a court order without notice”.
He said even in that order they inserted wrong company details.
“I find it illegal that they are closing me down,” he said.
He said Molapo’s company, Litjotjela Mall (Pty) Ltd, had entered into an agreement with him through lawyers that there was a new board of directors.
He said Molapo illegally kicked out the other shareholders from the company and they have a pending case in the High Court.
“Molapo acts as a secretary and does not have any decision-making powers alone,” Suleman said.
He said Molapo’s actions should be directed by the board.
He said Molapo does not want to discuss the agreement he had entered into with the former board of directors.
“He must honour the previous agreement on the sublease,” he said.
Suleman said what pains him is that they have made a lot of developments on the property under the previous agreement with Litjotjela, which Molapo is now ignoring.
“We have made developments worth over M4 million, constructed a garage and other buildings,” he said, adding that it is odd that Molapo wants him to pay rentals to use them.
“This cannot happen under my watch,” he said.
Suleman said it is either they take all their investments away or Molapo has to compensate them for all the developments on the site.
Molapo told the court in an affidavit that he is the one who was put in charge of collecting rentals from all tenants.
“They have failed to pay rentals to me without any justification and have refused to comply even after the demand had been made,” Molapo said.
He said the tenants owe him about M110 400.
He said he is a director, shareholder and board secretary of Litjotjela Mall (Pty) Ltd.
He said in June 2013 Litjotjela Mall and Ha Seotsanyane concluded a sublease agreement of 10 years.
He said it was agreed that Litjotjela was going to develop the site and was to collect all the rentals to be generated from the development site in order to recoup its expenses.
He said the 10 year period expired in May 2023.
“Prior to the expiry of the sublease agreement we engaged with Litjotjela (Pty) Ltd on the possibility of extending the sublease agreement,” he said.
He said after a lengthy deliberation, it became evident that they could not reach an agreement on the terms of the extension of the sublease agreement.
“It was at that time that we instructed our legal representatives to write to Litjotjela on September 20, 2023 that if the parties cannot agree on the extension of the sublease agreement the sublease shall be given a period not less than a year to find a market price to sell (the) business,” he said.
He said Suleman was informed that he was going to vacate the premises in a period of a year from June 2023 and that he had to pay rentals for that period at the rate of the rental payment immediately before the expiry of the sublease agreement.
He said other cited parties were further informed that they should no longer pay rentals to Ha Seotsanyane (Pty) Ltd.
He said to his surprise Suleman responded that Molapo does not have any authority to represent Litjotjela.
He said there is a court order issued on April 27, 2023 that he together with ’Mamphaphathi Katiso and Mpeuoa Mafike will remain in control and administration of Litjotjela Mall until the dispute has been resolved by the court.
He said Suleman is now benefiting from occupying the premises of Litjotjela without paying anything to him.
He said he has a right to receive rentals from its premises from the tenants occupying the premises.
He emphasised that his authority to represent Litjotjela in this matter cannot be questioned.
‘Malimpho Majoro
Business
The lawyer who designs wedding dresses
Published
3 weeks agoon
November 21, 2023By
The Post
Fikile ’Makhang Khang has always loved working with her hands, designing and producing fabulous patterns of knitwear.
“The sewing has always been something I have always liked to do,” Khang says.
“While I was still at the NUL (National University of Lesotho), I would crochet and sew my own skirts and even for others. It was common practice that I would be seen walking around working with a crotchet.”
Years after graduating with a degree in law from the university, Khang has now transformed her hobby into a booming business. She now designs wedding outfits for lovebirds.
She told thepost this week that for one to thrive in business, they must follow their passion.
Khang says although she graduated as a law student, she just could not fathom spending the rest of her life in the courtroom and in her chambers drafting legal documents.
It was for that reason that she decided to follow her passion by designing wedding gowns.
Khang was admitted as an advocate in the High Court of Lesotho in 2007.
Although the financial rewards as a lawyer aren’t satisfactory, it is a job she says she finds really fulfilling.
“In October 2010, I needed to be more focused in my craft and therefore abandoned practising as an advocate and concentrated on the bridal boutique business full time,” she says.
In an effort to meet the high standards for her clients, she would travel abroad in search of the most impressive wedding gowns she could lay her eyes on.
She would travel as far as China searching the best bridal collection.
She says her husband, who has been very supportive, has always advised her to search for other ventures to supplement the family’s income.
It was against that background that she thought of venturing into the sewing business.
Each and every generation has a way of conducting a wedding ceremony and the question of fashion is always pinned to it.
At some point in the past, shiny apparels were considered to be eye-catching.
Today, when people plan a wedding, Khang suggests that brides should go for heavy bead work, melano draped gowns with exaggerated shoulders, side trains and corsets.
On the other hand, grooms should go for a tuxedo, army green and wine coloured three piece suits.
Khang has not refuted the fact that, although vintage, there are timeless designs out there which remain relevant to this day.
A dent of cultural taste is also acceptable, she says.
It is undeniable that anyone can have a nuptial anytime of the year but for many they consider certain aspects which might impact on their occasion.
For instance, some people may prefer to host a wedding when it is warm so that everyone can showcase and flaunt their fashionable looks.
Moreover, other people can opt for end of year weddings when the majority of people are on holidays so it wouldn’t interfere with their schedules.
This explains the reason why spring marks the beginning of the wedding season.
“September to April is the best time to set a date for a wedding because it is warmer and people are at liberty to sew any design they desire,” Khang says.
Currently, it has proved that a lot of people are discouraged and shying away from having wedding ceremonies for different reasons.
Among them, others feel it is a waste of money as it is costly while others are appalled by alarming divorce rates which have nothing to do with whether one had a wedding ceremony or not.
Khang has however spoken highly of the need to normalise having wedding ceremonies in celebration of matrimony which unifies two devoted hearts in love.
“The celebration of a union between two people is very important,” she says.
“It brings the two families together. It makes everyone in attendance feel included and honoured to be part of the beginning of the union.”
Due to frustrations that often come up on the wedding day, many people are now resorting and adopting to outsourcing the services of wedding planners.
This gives opportunity to the bride and the groom to have a moment of their lives without having to be bothered to attend to the hurdles that are presented by the occasion.
“In the past, this was the role reserved for cousins or any immediate family members but I’m not sure if they are still willing to carry it out,” she says.
With a wedding planner in place, a space for calmness by the bride and the groom is at least guaranteed to a larger extent as there is someone overseeing that all is in order.
Although it’s optional, Khang says everyone can do with some help.
Organising a wedding can be tedious and stressful, a lot of brides never get to enjoy their special day.
If one can afford the services of a wedding planner, then they can go for it.
Khang has also highlighted that from the outlook many people believe that nuptials are for the sophisticated people due to their demands.
For ease of presentation, she has outlined necessities of a wedding: officiator, rings, music, cake, décor, photographer and refreshments.
In a nutshell, Khang is of the opinion that people should make wise decisions when planning for their weddings.
“The wedding day is a joyous day for everyone involved from the couple to their friends, family and colleagues,” she says.
“Everyone anxiously anticipates the day. The mood is always blissful and peaceful. The only thing that could go wrong is when couples fail to celebrate within their means and make ridiculous and unnecessary decisions.”
She says lately, anything seems to go when it comes fashion.
A lot of couples are breaking traditions and doing what best represents their style and preferences.
“Brides have been seen wearing coloured gowns for instance,” she says.
Khang now designs and makes wedding gowns, thanks to the skills she learned at the Bloemfontein Fashion Academy in 2016 which has beefed up her art.
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