BOG URGED TO FAST-TRACK CORPORATE GOVERNANCE GUIDELINES
A banking professional, Judith Haizel, has appealed to the Bank of Ghana (BoG) to ensure that it introduces the corporate governance guidelines in the first quarter in order to encourage banks to put in structures that will yield transparency and accountability in their activities.
“I am in absolute support of corporate governance guidelines; it directs you; it allows banks to achieve their goals and objectives and stakeholder interest in a formalised manner, making sure that there are independent structures to oversee those activities.
We are looking forward to it being implemented at least in the first quarter of this year. I think the Deputy Governor mentioned January, but we are hoping that in the first quarter we will be seeing some regulation coming through for us.” she told B&FT in an interview.
The Second Deputy Governor of the Bank of Ghana (BoG), Dr Johnson P. Asiama, disclosed in November last year that a new corporate governance guideline that will ensure financial soundness in the banking sector and improve economic efficiency and growth was in the works, with January as a tentative date for its introduction.
Despite most financial institutions already having some form of corporate governance guidelines in place, that of the BoG, “will give some guidance on how these structures should be formulated to promote their activities. So, for me it is an enhancement of the systems that a lot of banks already do have in place.” Judith Haizel said.
She also added that it is not a new initiative but rather “streamlining it and documenting it to make it more of a regulation than a recommendation.”
The BoG issued a Corporate Governance Exposure Draft in 2014 to elicit comments and constructive contributions from the industry.
The draft document has incorporated suggestions from industry, including a review by the IFC, and ‘remains work-in-progress that would be issued appropriately when completed’.
Some of the highlights in the guidelines, Dr Asiama said, will address: the tenure of CEOs which is expected to be capped at a maximum of three terms of 5 years per term. Also, Non-Executive Directors shall have a tenure of three years for no more than two terms, and shall be in the majority on every Board.
In the case of foreign banks, the positions of Managing Director and Board Chair cannot be occupied concurrently.
Additionally, the size of bank Boards shall be limited, the retiring age for Directors prescribed and attendance at Board meetings by Directors disclosed in annual accounts.