The Institute of Directors is leading an advocacy effort aimed at pressurizing any political administration in power following the impending December 7 general elections to fundamentally change how the chief executives of state owned enterprises are selected. This is part of the IoD’s campaign towards ensuring that both government and corporate Ghana adopt best corporate governance practices.
The President of the IoD, Rockson Dogbegah on behalf of the Institute has called on whoever wins the impending polls to appoint boards of directors for SOEs, but then sit back and let those boards appoint the respective chief executives of the SOEs. This is accepted best practice globally, but is in direct contrast to the practice in Ghana where the President appoints the CEPs of each SOE himself, usually without recourse to the board which has the legal responsibility to select the CEO. Indeed in many cases the CEO is actually appointed before the board is constituted and this gives the CEO the impression of being above Board supervision having superceded the board.
“Ghana has a practice where CEOs of State-Owned Enterprises are appointed ahead of the formation of the respective boards charged with the responsibility to direct the affairs of such enterprises” Rockson Dogbegah noted, while launching this year’s edition of the Directors Week, an annual event organized by the IoD. “This tradition defeats the principles and practices of good corporate governance. IoD-Ghana will like to bring this to the attention of all Presidential hopefuls, in the event that they are elected to power, Ghanaians will like to see best practice at play. This will ensure corporate boards are appointed and sworn into office with the mandate to manage such entities they have been appointed to serve. The boards should use its powers to search and appoint suitable CEOs who will be charged with the responsibility to manage the State Owned Enterprises on a day to day basis.”
Top appointments in SOEs – Board and executive management positions inclusive – are generally seen as ways of rewarding political allies and electoral campaign contributors and the fact that the president appoints the CEOs rather than leave that task to the board as is required by both legal provisions and best corporate governance practice, seems to confirm this belief.
This year’s Directors’ Week celebration, the third since its inception will be a virtual event. The Theme for this year’s event is Good Corporate Governance and Leadership: An Essential Framework for the Management of Uncertainties.