Business

Responsibilities of the Board of Directors

Published

6 years ago

May 31, 2019

THE ever increasing occurrence of corporate scandals has evoked a renewed focus on the role of directors and the importance of good governance. The world is changing rapidly. We have witnessed rapid technological and scientific advancement. The ubiquitous social media has introduced radical transparency in how people communicate.
Organisations have not been spared by this radical change in how people communicate. Whatever organisations do is now a subject of public scrutiny. Climate change has taken centre stage in geopolitical discussions. The Internet of things, the 4th Industrial Revolution and Big Data have become major issues that organisations can’t ignore if they have to survive into the future. These new global realities have to be considered by any serious business leader since the public is now demanding more accountability.
The above issues have brought more demands on how businesses should be directed and controlled. Codes of corporate governance have been developed to assist business leaders in overseeing the running of organisations. These responsibilities are over and above the legal requirements in the Companies Act.
In South Africa the King Code of Corporate Governance has been developed. The UK has the Combined Code and other countries have their own types of codes of corporate governance. There is a difference between the law and a voluntary code of corporate governance.

The law provides the framework that people must not transgress and provides the sanctions they will face if they do whereas a voluntary code like King or the Combined Code seeks to set out the principles and best practices that organisations with a sincere desire to achieve good governance should follow.
However some parts of a governance code may be formally integrated into legislation/regulation, for instance some elements of King III were incorporated into the new South African Companies Act. As a result of these developments the responsibilities of the directors have therefore expanded from the normal statutory requirements in the Companies Act to include those espoused in the codes of corporate governance.

It is common knowledge that no law or code can realistically hope to prevent criminal activity. If someone wants to do something wrong, he or she will do it either by disregarding the law or finding a loophole within it or by not adopting the code of good corporate governance.
As a result of this reality the King IV code of governance has placed more emphasis on creating an ethical culture and mindset which will encourage individuals and companies to act in the right way even when nobody is looking because they understand that to do so makes good business sense and reduces risk.
In the King IV Code, corporate governance is defined as the exercise of ethical and effective leadership by the governing body or Board of Directors towards the achievement of the following governance outcomes: ethical culture, good performance, effective control and legitimacy. Ethical leadership is to do with integrity, accountability, competence, responsibility, fairness and transparency.

Effective leadership is results driven. It’s about meeting strategic objectives and positive outcomes. The driver of corporate governance is the Board. So the Board is expected to exercise ethical and effective leadership. Some of the responsibilities of the Board in King Code are discussed below.
One of the primary responsibilities of the Board is to steer and set the strategic direction of the organisation on the basis of which management will develop the strategy which is to be approved by the Board. Management will develop policies and operational plans that give effect to the strategy.
Management will then implement and execute the strategy in line with the approved policies and plans. The Board will oversee and monitor the implementation and execution of the strategy by management and will be accountable for the performance of the organisation.

The other responsibility of the Board is to lead ethically and effectively by ensuring that its board members exhibit:
Integrity – acting ethically and in good faith and avoiding conflict of interest,
Competence – having sufficient working knowledge of the organisation and act with due care skill and diligence
Responsibility – collective responsibility in steering and setting the direction of the organisation, taking risks and capturing opportunities, and taking responsibility for anticipating or preventing negative outcomes of their decisions

Accountability – be willing to answer for the execution of their responsibilities
Fairness – adopt stakeholder inclusive approach in the execution of their roles
Transparency – being transparent in the way they exercise their roles
The other responsibility of the Board is to ensure that the organisation is and is seen to be a good corporate citizen. Since the organisation operates within the community it should display good citizenship by obeying laws of the nation, ensuring that its core purpose, values and strategy are in line with society’s expectations.
It should ensure that its employment processes are fair and equitable; and that it prevents environmental degradation resulting from pollution, waste disposal; and weeds out corruption and promotes human rights and consumer protection.
The Board should ensure that it is composed of members with a balance of skills, knowledge, independence, diversity and experience. This will ensure that it will be able to discharge its responsibilities effectively. Diverse boards are considered to be more effective because different perspectives can result in less risky decision-making and a better representation of stakeholders’ interests.

Given today’s fast-changing world, one that is volatile, uncertain, complex, and ambiguous and a globalised operating environment, in which long established business plans and strategies are becoming digitally disrupted, boards need directors with a wide range of backgrounds, experiences, and perspectives which will help in effective decision making.
The Board should oversee risk management by ensuring that risk is integral in decision making.
The Board should set the organisation’s risk appetite and delegate to management the responsibility to implement and execute effective risk management.
The other responsibility is for the Board to manage technology and information in a way that will enable it to achieve its strategic objectives. Around the globe, organizations of all types and in all industries are seeing their long-standing business models becoming digitally disrupted. Digital technologies are impacting on organisational performance in many ways. Digital technologies are transforming the customer experience.

Organizations are being enabled to tailor the products or services they offer to the unique preferences of each customer. Also digital technologies are transforming the way organizations deliver their products or services, allowing customers to obtain products and services when and where they want them.
It’s therefore important for the Board to harness technology and information for the good of the organisation. Many traditional companies, however, have yet to fully determine how best to utilize digital technologies such as cloud, analytics, social media, and mobile. The above discussions have touched on some of the key responsibilities that Boards should adopt to ensure good corporate governance.

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 .

Business

Take a Break from Summer

Published

1 month ago

December 18, 2024

The Post

Press release for KFC Lesotho

Date: Monday, 16 December 2024

Summer, what a wonderful time of year…

When influencing gets too much

When the news cycle gets too much

When the endless queues get too much

When the shopping chaos gets too much

When the unavailable transport gets too much

When the holiday work shifts get too much

When the lawn mowing gets too much

When the loud music gets too much

When the traffic gets too much

When the relentless schedule gets too much

When the heatwaves get too much

When the weather warnings get too much

When the suntan lines get too much

When the ever-growing laundry pile gets too much

When the festivities get too much

When the 2025 university applications get too much

When the guests overstaying their welcome gets too much

When the social media mayhem gets too much

When the out of sync traffic lights get too much

When the New Year resolutions get too much

When the travel expenses get too much

When reapplying sunscreen gets too much

When the packing and unpacking gets too much

When the photo-taking gets too much

When the flies get too much

When the pool maintenance gets too much

When the fully booked airlines get too much

When the mosquito bites get too much

When the fishing trips get too much

When the baking gets too much

When the road trip stops get too much

When the sand in the car gets too much

When the picnic ants get too much

When the papa and morogo get too much

When the braai smoke gets too much

When the television shows get too much

When the homemade cooking gets too much

When the hot car seats get too much

When the outdoor markets get too much

When the air-conditioning bills get too much

When the nature hikes get too much

When the garden-watering gets too much

When the hot sidewalks get too much

When the bike rides get too much

When the late nights get too much

When the impromptu trips get too much

When the 4×4 rides get too much

When the golf games get too much

When the ice cube trays get too much

When the late-night crickets get too much

When the entertaining gets too much

When the bumpy boat rides get too much

When the paddleboarding gets too much

When the public pool crowds get too much

When the lack of parking gets too much

When the summer internships get too much

When all you need is a breather

You have made it to the end. Take a break from summer with KFC Lesotho on Saturday, 21 December, a day to pause, refresh, and savour the start of holiday mode. Swing by KFC for a taste of summer and officially step into the holidays, recharged and ready. See you there!

Discover KFC’s Summer Delights!

KFC Summer Twisters: https://www.youtube.com/watch?v=LVlAX00WROU

KFC Summer Krushers: https://www.youtube.com/watch?v=QpCn-tFYrls

KFC Summer Buckets: https://www.youtube.com/watch?v=SbiOjRR58UA

End.

About KFC Africa

KFC has been in South Africa for over 53 years and has more than 1,300 stores across the country. The first KFC restaurant in South Africa opened in 1971 in Orange Grove, Johannesburg. KFC is the leading quick-service restaurant brand in South Africa with just under a third of market share, according to Brand Image Tracker. KFC serves more than 20 million customers a month and we work hard to ensure that no matter which of our restaurants they walk into, they will get that distinctive KFC flavour and have a great experience. KFC’s Original Recipe® Chicken was first made by Colonel Harland Sanders in 1940 when he perfected his secret recipe of 11 herbs and spices at his restaurant in Kentucky. Today, KFC is the world’s most popular chicken restaurant, still preparing our chicken with the Colonel’s secret recipe to his exact standards. Every KFC restaurant follows the same global processes and procedures to ensure that our customers get great-tasting food, every time.

KFC Lesotho socials:

Instagram – @kfclesotho – https://www.instagram.com/kfclesotho/

Facebook – KFC Lesotho – https://www.facebook.com/LesothoKFC

X – @KFC_Lesotho – https://x.com/KFC_Lesotho

Business

Demystifying death benefit nomination

Published

1 month ago

December 16, 2024

The Post

I recently attended a trustee training session, and it sparked a thousand of opinions and emotions to fellow trustees and principal officers.

It is remarkable how people approach their pension funds with a blend of care and chaos — carefully watching contributions grow but leaving the aftermath of their departure to luck and a roomful of trustees.

With the Pension Fund Act (PFA) 2024 in place, requiring members to fill out and update death benefit nomination forms annually, one would think the process is foolproof.

Yet, we find ourselves navigating the maze of member reluctance and the emotional minefield that comes with deciding who gets what.

The PFA 2024 makes an elegant appeal to order, asking pension fund members to take charge of their legacy by nominating beneficiaries.

But, instead of pens gliding over forms, there is hesitation, resistance, and in some cases, outright abstinence.

What should be a simple administrative act seems to invoke existential dread or, worse, familial politics.

When Nomination Feels Like Negotiation

One of the most notable trends is the discomfort married members feel at the mere suggestion of allocating 50% of their death benefit to a spouse.

For clarity, the PFA does not say they must — but logic and love might.

However, these conversations often spiral into arguments over “what ifs.”

What if the marriage does not last?

What if the spouse uses the money “irresponsibly”?

What if leaving an equal share to children or a secret favourite nephew makes more sense?

These “what ifs” often lead to another troubling “what if”: what if no nomination is made at all?

Emotions run high.

Sometimes, the process of completing the form turns into a reflection of unresolved family tensions, where the form itself becomes a battlefield for hypothetical posthumous power plays.

Trustees, meanwhile, are left to pick up the pieces, making discretionary decisions that almost always leave someone unhappy.

What the Law Actually Says

Let us address the elephant in the room.

The PFA does not dictate that anyone’s spouse, child, or distant cousin must receive a cent.

The law requires you to nominate beneficiaries but leaves the who and how much entirely up to you.

And yet, myths persist, leaving members to believe they are bound to make obligatory allocations.

This misunderstanding is not just inconvenient; it is entirely unnecessary.

The beauty of the PFA lies in its simplicity: nominate someone — anyone — so your trustees don’t have to piece together your
wishes based on tea leaves, distant

relatives, or that one time you mentioned something in passing to a colleague.

The Real Cost of Silence

If leaving decisions to trustees sounds romantic — think noble strangers making wise decisions — let me assure you, it’s not.

Trustees do their best with the tools they have, but without a completed nomination form, their decisions are guided by discretion rather than your explicit intentions.

And discretion, noble as it sounds, often breeds disputes.

Disgruntled beneficiaries are not just an unfortunate byproduct of silence; they are its loudest consequence.

Without clear instructions, your death benefits might fund lawsuits instead of legacies.

Is that truly the financial wisdom you have cultivated over a lifetime of disciplined contributions?

Completing the Form: The Act of Taking Control

Filling out the nomination form isn’t just compliance; it is an act of empowerment.

It’s the financial equivalent of saying, “I trust myself to make the best decisions for my loved ones.”

It’s an opportunity to assert control over your life’s earnings and ensure they benefit those you deem most deserving.

Let us put it plainly: by completing this form, you eliminate guesswork, prevent disputes, and protect your loved ones from unnecessary turmoil.

You also spare trustees from playing Solomon with your assets — a responsibility they never asked for but inherit when you opt for avoidance.

It is not that deep!

For all the effort we pour into overthinking, let’s consider the alternative — actually completing the form.

You’ve already made harder decisions, like choosing between investment portfolios or deciding on your retirement age.

Writing down a name or two, alongside their allocations, is, comparatively, a walk in the park.

And for those of you abstaining because “it’s complicated,” let us reflect: is it more complicated than the potential legal battles, heartache, and chaos that might follow your departure?

Or are we simply procrastinating because planning for death feels uncomfortably final?

Your Legacy, Your Way

At the heart of it all, filling out the nomination form isn’t about complying with a law or appeasing trustees.

It is about ensuring your legacy aligns with your wishes.

It is about giving your loved ones clarity and peace of mind when they need it most.

So, grab that pen.

Fill in that form.

It might not be the most exciting thing you do today, but it could very well be the most meaningful.

After all, if you’ve spent years building a financial future, why let your final act of planning be defined by inaction?

Teboho Makoetlane

Business

More US funding for development projects

Published

2 months ago

December 2, 2024

The Post

MASERU-THOMAS Hines, the US Embassy’s interim head, has applauded Lesotho for passing the Millennium Challenge Corporation (MCC)’s scorecard, paving way for continued development funding.

The MCC is providing assistance to Lesotho to strengthen good governance, economic freedom and investments in the country, managed by the Millennium Challenge Account (MCA-Lesotho Compact II).

The MCC donated US$300 million (approximately M5.4 billion) for health and horticulture development.

For the country to qualify, it had to pass the MCC’s scorecards.

Hines told Prime Minister Sam Matekane on Tuesday at the State House that the good news is that Lesotho passed, although there are some other things the country has to improve.

For this year, the passing indicators are girls’ primary education completion rate, natural resource protection, land rights and access and fiscal policy.

Indicators that slipped below the pass rate are government effectiveness and freedom of information.

“Of MCC’s 76 scorecards, only 26 countries passed while 50 did not and the good news is that Lesotho once again passed the scorecard,” Hines said.

He said not only did Lesotho pass but it has also improved from passing 15 indicators last year to 17 of 20 indicators this year.

Hines said the accomplishment reflects Matekane and his government’s commitment to strengthening democratic governance and fostering prosperity.

“Noting the decline in control of corruption indicator, we seek avenues to do more together with Lesotho to combat corruption,” he said.

“Not only does regression in this area put Lesotho at risk of failing the scorecard we also know the corrosive impact of corruption on the economy and society.”

He said they seek to maximise the compact’s ability to ensure greater access to quality healthcare.

Matekane said the scorecards assess the government’s performance in key areas throughout the year to determine the continuing eligibility regarding MCC compact funding.

He said last year he urged the cabinet to build on the momentum from 15 out of 20 indicators.

“Let me take this opportunity to celebrate our sustained achievement of passing 17 out of 20 indicators which is a 10 percent increase from last year,” Matekane said.

“Specifically, I committed last year to ensure that Lesotho will submit data to support the assessment of girl’s primary education completion rate,” he said.

He said he was pleased with the progress overall and on gender parity in education and they aim to achieve better results next year.

In addition to this, he said, there is still a lot of work to be done, especially around trade policy, government effectiveness and particularly the freedom of information with a notable decline from 83 percent down to 43 percent.

“Our commitment to control and eliminate corruption remains steadfast. We are working tirelessly to expose corrupt activities, keeping the public sector honest and accountable,” he said.

“The commitment we have made of investing in our people has never wavered over the years and the government is also focused on improving access to quality health services to every Mosotho regardless of their background and location,” he said.

Moipone Makhoalinyane