Chapter five: Corporate governance 5.2 Standards and codes i. Summary of the CSAR 504. The CSAR states that Lesotho has adopted the relevant assessment codes for the corporate governance thematic area, but provides no further information on the dates of accession or the status of implementation of the various codes. ii. Findings of the CRM Principles of corporate governance (OECD, Commonwealth, King Report) 505. Corporate governance is a relatively new concept in Lesotho. The country does not have a national corporate governance code as yet. Delays in promulgating, revising and amending legislation relevant to corporate governance, such as the Companies Act, renders the accountability of corporations, directors and officials difficult to develop, enforce and monitor. Bureaucracy and institutional inertia also militate against entrenching good corporate governance in the country. 506. The CBL and LIA have roles in promoting good corporate governance. Their roles are driven principally by their core mandate of regulating the financial sector and the accounting profession. However, their roles are limited. LIA was involved in a stalled attempt to set up an Institute of Directors that has not come to fruition more than five years later. In a meeting with the CBL, the CRM was informed that the CBL has drafted a code of corporate governance for the financial sector and is in the initial stage of circulating it for comments. The CRM was also informed of an initiative to develop a code of governance for SOEs by the Ministry of Finance and Development Planning (MoFDP). It was, however, unable to ascertain the status of this initiative. 507. Foreign companies that are subsidiaries of South African companies, like Nedbank and Lesotho Standard Bank, subscribe to, and are encouraged to apply, the corporate governance principles of the King II Report. The King Code also promotes the practice of CSR. Some of these companies are active in key areas such as: protecting the environment; combating the Human Immunodeficiency Virus (HIV) and the Acquired Immune Deficiency Syndrome (AIDS); and alleviating poverty. 508. The challenge for Lesotho is that the drive to lure investors is firmly anchored on establishing sound corporate governance. The extent of success of the investment strategy depends on the standard by which the Lesotho business environment is governed. It is in Lesotho’s long-term interest to define clear-cut corporate governance standards and codes by which corporations should be governed. International accounting and auditing standards 509. LIA is charged with regulating and overseeing the practice of accountancy and auditing in Lesotho. LIA was established by the Accountants Act of 1977 (as amended in 1984). It is a member of several international and regional institutions given the responsibility of developing and issuing international accounting standards. They include the International Accounting Standards Committee (ISAC), the International Federation of Accountants (IFAC) and the Eastern Central and Southern African Federation of Accountants (ECSAFA). LIA also collaborates closely with the South African 139