Page 13 - FOL2023

Corporate Governance
Corporate

governance

in Lesotho

Dr. Seth Macheli

Introduction

Historically, the need for corporate governance was borne out
of the potential conflict that resulted from the legal novelty of

corporate legal personality whereby a company became a juristic
person that is distinct and separate from those who formed it.

y virtue of separate legal personality, the control owners/shareholders.
Bof the company, its property and affairs shifted While it could safely be said to date to at
from those who formed the company and vested least the formation of the East India Company, the

in a board and management (that is, officers of the Hudson’s Bay Company, the Levant Company and
company). There were thus concerns of possibility the other major chartered companies launched
of abuse of control of companies by a board and/ in the 16th and 17th centuries, the concept
or management for their own benefit and at the corporate governance became in vogue only in

expense of the owners. Corporate governance thus the 1970 in the United States of America, growing
grew out of the need to protect the interests of the to distinct prominence after the global economic

and financial meltdown in 2008. broader generality of a corporate capital investment, particularly
Good corporate governance organisation’s stakeholders and foreign capital investment. Indeed,
is today generally accepted as protection of the environment. the Government of Lesotho’s
one of the critical factors for For developing countries, good National Strategic Development

driving economic growth and governance of companies is seen Plan II (2018/19 - 2022/23)
development, safeguarding of the as critical to attract and retain (NSDP II) has, under Key Priority

14 FOL Quarterly Issue 2022