Measures and policy guidelines have been initiated by the Institute of Directors (IoD) Ghana, to engage operators and owners of Small and Medium-sized Enterprises (SMEs) in the country in observing best corporate governance practices.
This follows a formal proposal by the Minister for Business Development, Dr. Mohammed Awal during an international conference on enhancing and sustaining good corporate governance practices held recently in Accra.
The move is seen as necessary for sector players because it is estimated that about 70 percent to 80 percent of SMEs on the African continent lack effective succession planning and therefore find it increasingly difficult to survive beyond their founders.
The collapse of such businesses means job losses as this shortcoming subsequently affects the economy as a whole. The collapse of a number of SMEs has largely been attributed to poor corporate governance practices where most of such entities are operated by family owners who lack the capacity for effective succession planning.
Thus, when the owner passes away or becomes incapacitated, many of those who take over the business are unable the manage and sustain the it effectively.
Speaking with the Goldstreet Business during an exclusive interview, president of IoD, Mr. Rockson Dogbegah noted that his outfit is planning a national dialogue with their honorary fellows – a group of people considered as very experienced by the Institute, in September this year to discuss effective, sustainable ways of dealing with the issue.
“Some interventions will include reorientation for SMEs, as well as mentoring and training in corporate governance with emphasis on succession planning”, he reiterated.
The training will focus on four main thematic areas of corporate governance practices which comprise effective culture, good performance, effective controls and legitimacy. It is expected that the training will start immediately after the national dialogue in September.
In Ghana, it is estimated that SMEs contribute more than 70 percent of Ghana’s Gross Domestic Product (GDP) and account for 92 out of every 100 businesses. Globally, the contribution of Small and Medium Enterprises to the growth of national economies is considered as significant.