The government recently appointed a new board of directors to steer the out-of-sorts Lesotho Electricity Company (LEC), which has been hounded by reports of mismanagement coupled with allegations of being in financial dire straits. For instance, the company’s general manager appeared before the Maseru Magistrate’s court on charges of fraud involving a whopping M12million.
In this exclusive interview, board chairman Lejone Mpotjoane outlines the board’s turnaround strategy with theReporter’s ‘Majirata Latela.
ML: Mr Mpotjoane congratulations on your appointment as chairman of the LEC board. Now let’s start with you introducing yourself. Who is Lejone Mpotjoane?
LM: Lejone Mpotjoane is a governance specialist currently working full time at the Lesotho Revenue Authority as a senior manager risk and governance. I have been in this governance field for over 10 years now. I started out at LRA as a cooperate risk manager in 2007. That was when I started working on corporate governance. I was in those years also appointed by members of the Bokoro High School board of governors to help the school raise its performance; that could only be achieved if the board performed well.
I have been the chairman of the Institute of Directors Lesotho (IDL) since 2017. I am a board member and chairman of the audit risk and compliance committee for Lesotho Post Bank. I was also appointed by Centre for Accounting Studies to be part of their sub committed in risk management as a risk expert; Botho University also appointed me to be an industry advisor for their BCom Risk Management programme. I am also the chairman of the adjudication committee for Bacha Entrepreneurship Project.
I studied business communication at the National University of Lesotho; I have also undergone a certified business continuity lead implementer programme, which I did with the professional and certification board of the United Kingdom Management board. I am currently studying to be a certified director and hope to further study chattered directorship.
ML: Please take us through the brief of the board. What exactly are your responsibilities?
LM: The board does not have many responsibilities, the top responsibilities are to provide an oversight role and strategic direction to the company; we also approve a controlled environment through policies, standards and procedures. We are also responsible for allocation and approval of resources; we also hire and fire when there is a need, we are also responsible for performance appraisals of the executives.
We also protect the interests of all stakeholders, which are the ministry responsible, the public, the tax authority and the creditors.
ML: For clarity’s sake, we have the management of a company on one hand and the board on the other. What exactly does each do, and where do they toe the line?
LM: The board of directors does not have offices in the company, we only have a boardroom where we meet once after a while; on the other hand, the management of the company has offices in the company and they come every day to execute what the board has approved. There is very clear separation of powers between the board and the chief executive officer in that way.
ML: What qualities or competencies does one need to be appointed to the board of a company like LEC?
LM: One needs to have qualifications on governance, engineering and all those relevant qualifications; however, experience is very key in this field and one needs to have a clear understanding of the running of a company. Also independence is a needed; someone with an independent mind can make decisions and stand for them. Integrity and the love of the country are also needed in this position.
To have a board that is effective, there is need for diversity of qualifications among board members.
ML: We are not sure if you are comfortable with this question, but would you say this new board members do possess the qualities and competencies you have mentioned above?
Yes, I do believe our team has the best qualities and competencies; we have two members from the last board. Like I said, we have people with different qualifications; we have engineers, accountants, lawyers and many other qualifications.
Truly speaking, we still are short of some of the qualities, looking at the complexity of the business we are dealing with here, but I am very comfortable with the members we have. However, according to the regulations, the board has the opportunity to hire expects if there is a need and put them in its subcommittee.
ML: LEC is one of those entities that have in recent years had board members appointed to reward political loyalty. How has this patronage benefitted or harmed the company?
LM: On the issue that the position was a political reward, I would say it’s a sentiment that can be given by anybody but what remains is, it is of utmost importance for an appointee to perform responsibly.
It also comes to a point where one needs to use their fiduciary responsibilities to make decisions which they can account for if they get sued. The responsibilities in the end remain with the appointed person and not necessarily the personality.
However, we cannot shy away from the fact that some appointments to government positions still bear some challenges in that they are not well regulated, but the Institute of Directors of Lesotho does have a code of corporate governance which can be used to appoint people to chairmanship positions.
ML: Fair enough. Now, please explain in detail the mandate of the board you are leading.
The mandate of the board that I am leading is to rebrand LEC; we may agree that the image of the brand is tainted by what has been going on in the company. We need to build an LEC that the nation will see and understand differently; we need an LEC that is ethical and has integrity. We also need to build our customer care because as it is, our customer care is very problematic.
As a service provider, we need to give customers what they pay for and nothing less. We need to offer quality services; we need to build a stable LEC which will have quality infrastructure that people will not complain of every time. LEC currently has an asset base of M4billion and that is a huge investment by the government of Lesotho, which needs to be very well protected by all stakeholders.
ML: LEC has been hounded by allegations of gross mismanagement which are said to have left it in financial dire straits. Among others, there have been reports of the company paying two CEOs at the same time, the acting one and the substantive one who was suspended with full pay, and no one appeared to be prepared to finalise the matter. What is the situation at the moment?
LM: In every organisation when things are not going well, there is someone who will be removed from the organisation and when that happens, that person will still perform their duties while they are still investigated.
We will also agree that processes such as the courts and investigations are very slow and will be beyond the management’s control. Yes, there has been the issue of paying two CEO’s at the same time but it happens in all other organisations when matters get to a point where one needs to be suspended.
Currently, the substantive job holder and the acting CEO are both suspended while being investigated after they are allegedly made decisions which one would say were not benefitting the company. Even so, those people did perform their duties and maybe made mistakes just like everybody. No one is perfect, but I believe the current board and the staff will work hard to resolve such matters for the benefit of the nation.
ML: Reports persist that lucrative tenders have been awarded to totally incompetent companies to perform important and sensitive tasks like putting up power lines. The only qualification of such companies is their owners’ membership of a certain political party. What action can Basotho expect to see you taking to correct this practice?
LM: Procurement, like other transactions, attracts corruption but the company needs to set up a controlled environment which will help the organisation to avoid that; we have heard and seen reports of illegal awarding of tenders. We aim to building the integrity of the company to avoid such issues.
We are also going to make sure that the budget allocation that LEC is given is used in the country; the awarding of tenders should prioritize local people while on the other hand growing those small business people so that they graduate to become big business people. LEC will work hard to make sure that it helps in growing the economy of the country.
ML: LEC had earlier applied for tariff hike of over 30 percent. But last month, the regulator – LEWA – announced a 0% tariff hike. Surely this is mind boggling. How is it even possible?
LM: Review of tariffs happens every year and no one predicted that this year we will be facing Covid19, which seems to be killing the economy of the world and resulting in price hiking. I am happy that we did not get the increase because it would not be fair for Basotho. I am happy that I came in when there is no tariff hike. What LEC needs to do now is to see how it can outsource money to close that gap.
LEC wouldn’t be happy to contribute to killing some of the businesses; this is the time when businesses are having problems. I regard this 0 percent as our way of helping the country to fight this pandemic.
ML: As we approach the end of this interview, please tell us: what is the vision of your board regarding LEC, and that is in your to-do list?
LM: The problem that many companies do is to have a list of things that they are going to do; we are not here with huge dreams of what we want LEC to look like, but we came here with a strategy of diagnosis which will engage all stakeholders so that we will work on the problem.
As much as LEC has been on everyone’s lips, there have been good things that are happening in the company which did not receive publicity, and we are here to rebrand the company and do away with the bad image it has portrayed in for years now. To do all this we are going to inculcate good corporate governance and ethical culture.
ML: What can Basotho expect to see you and LEC doing, that is different from your predecessors?
LM: We are not competing with each other here; those who came did their work the way they saw fit and we as the new board are going to work hard as well to make sure that we remove ourselves from LEC operations.
We will make sure that we do our job of being an oversight body; we are also going to update policies such that they allow us to do our oversight job properly and leave the execution work to those who are responsible.
We are also going to make sure there is execution; many people plan but fail to execute those plans, that’s how we would like to do things differently.