The Institute of Directors, a professional body whose central objective is the promotion of corporate governance in Ghana conferred honorary fellowship on the 1st and 2nd Deputy Governors of the Bank of Ghana.
In a speech given by Dr. Maxwell Opoku-Afari at the ceremony he indicated that:
“…there are important lessons to learn from the recent banking sector clean up that highlights the importance of a strong corporate governance framework in our institutions. Right at the inception of the banking sector clean-up process, the Bank of Ghana, through its assessment of the entire industry, established that aside other factors, weak corporate governance structures and practices in most of the collapsed banks contributed to what could have been one of the major financial sector crisis in the history of Ghana if it was allowed to evolve in a disorderly fashion. You will be surprised to note that, due to the lack of proper structures and oversight, most of these gaps, poor risk management and governance frameworks eluded directors of these banks and to some extent the regulator. However, once the trigger for solvency kicked-in, opportunities for reversing the consequences were simply untenable; a consequence that has cost the tax-payer more than GHS22 billion.”
He further indicated that:
“It was to this end that the Bank of Ghana implemented a number reforms to serve as a reference point for the banks’ own internal corporate governance efforts as well as for regulated institutions. We are now on course to:
(1) improve on due diligence and licensing processes;
(2) strictly enforce directives and apply sanctions where necessary;
(3) provide more clarity and education on the BoG corporate governance directives;
(4) fully operationalise the provisions in the Banks and Specialized Deposit-Taking Institutions Act 2016, (Act 930) to ensure greater regulatory compliance with the Basel Core Principles (BCPs); and
(5) enhance the risk based supervisory framework to ensure holistic management of risk by banks, SDIs and MFIs.
He accepted his fellowship by calling for an effective and ethical corporate governance practices and a National Corporate Governance development agenda as a key part of a national developmental strategy as Good corporate governance practices in all sectors of the economy will ensure its proper function.
Mrs. Elsie Addo Awadzi, also accepted her fellowship member of the Institute of Directors, Ghana by making the following remarks:
“…if good corporate governance was ever critical in our nation’s life, it is now. Our nation is indeed blessed with bountiful resources in the form of natural resources, good human capital, a good climate, a strong democracy, and peace, among many others. Opportunities for accelerated growth and socio-economic development are endless, but without the solid foundation that good corporate governance offers, we cannot build sustainable public and private sector institutions to support a sustainable and resilient economy… What is required therefore, is a new normal where governance is a key driver for social economic transformation. A new normal where each director does not only preach, but lives out authentically the values of good governance and ethical leadership, while setting the tone for their institutions to operate in ways that create lasting value for all key stakeholders. Good corporate governance has long evolved from the days when it was all about the shareholders’ bottom line often at the expense of other key stakeholders who contribute to the fortunes of an institution. It is now well accepted globally that good corporate governance involves more than creating value for shareholders. It is about governing and managing institutions based on a value system that helps to realise and preserve value for all key stakeholder groups including shareholders, employees, customers, communities, the environment, and for future generations.”
She then ended by emphasizing the earlier call of the President of the IoD, Mr. Rockson Dogbegah for a National Corporate Governance Code by saying, “I strongly endorse the IoD-Gh’s plans to spearhead the development of a National Corporate Governance Code. This will build on the enhanced director’s duties, responsibilities, and liabilities under the new Companies Act 2019 (Act 992) and the Corporate Insolvency and Restructuring Act 2020 (Act 1015), as well as sector-specific Corporate Governance requirements such as those published by the Bank of Ghana, Securities and Exchange Commission, the Ghana Stock Exchange. It will also build on the principles of environmental and social governance enshrined in the Ghana Sustainable Banking Principles launched by the Bank of Ghana, the Ghana Association of Bankers, and the Environmental Protection Agency in November 2019, and the Extractive Industries Transparency Code adopted by the Ghana Extractive Transparency Initiative, among others.”
It therefore appears the stars are aligning for an interesting corporate governance landscape in Ghana. We can only look forward to such beauty with keen outlook to the banking industry at least. With the two governors joining the Institute of Directors, the financial services sector prepare to upscale their corporate governance architecture to what could possibly be described as best practice. Hopefully other sectors will have a spill over once such a National Corporate Governance Code is implemented.
My name is Yaw Sompa, I am a member of the Institute of Directors Ghana and I am excited about the future of Corporate Ghana.