Poor corporate governance promotes fraud

By ‘Mathabana Kotelo

MASERU — Poor corporate governance weakens an organisation’s potential and can eventually lead to financial difficulties through fraud, corruption, illegal acts or irregularities, Auditor-General Lucy Liphafa said on Monday.

Liphafa was speaking at the first annual Governance Beyond Boards seminar held at Maseru Sun Convention Centre.

The two-day symposium was aimed at teaching directors, managers, auditors, accountants and public and private sector representatives, among others, the importance of good governance in a business environment.

The seminar covered a discussion on benefits, rewards and challenges linked to corporate governance, risk and compliance.

Opening the session, Liphafa said the concept of corporate governance is a topical issue defined as the way in which organisations are directed and controlled.

“Therefore there is need for organisations to implement principles or standards of corporate governance to improve business behaviour,” said Liphafa.

She cited attitudes of resistance and lack of understanding of  the importance of good governance by departmental heads in both the public and private sectors as being among some of the obstacles to improving good governance in organisations.

Meanwhile, chief facilitator Terrance Booysen hailed the late Nelson Mandela for having demonstrated good governance and having embodied the ideals of a good leader.

Addressing the attendees, Booysen said governance, risk and compliance ought to be practical processes and not just a once-off event.

He challenged participants to stir change in their respective departments, organisations and homes saying “governance starts at home, if one cannot manage their family, they cannot do well at managing an organisation”.

“Compliance goes beyond laws and legislation, it also includes strategy and regulations,” Booysen said.

“Businesses ought to prioritise people, planet and profit, in that order,” he added.

The Registrar of Companies, Tlohelang Aumane, said to improve governance and compliance within organisations in the public and private sector, the Ministry of Trade and Industry, Cooperatives and Marketing had set up a compliance department and switched to a computerised company registry.

Strides have been made in the ministry, according to Aumane, to simplify processes and encourage compliance by companies with the Lesotho Companies Act (2011).

“After the new act was put into place, Lesotho moved up from ranking 144 to 79 in the World Bank’s  ease of starting a business index . . .” said Aumane.

Chief Operating Officer at Alliance Insurance Lesotho, Keith Wallace, described the seminar as thought provoking and relevant for the development of companies.

“I enjoyed the seminar very much and I think it is good that seminars of this type are happening here in Lesotho as they expose us to internationally practised methods and opens our eyes to the best modern practices,” said Wallace.

The seminar was organised by Lehaha Institute, a research and training consultancy firm in association with the Lesotho Times and Bloom Communications.

 

 

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