The Bank of Ghana (BoG) is expected to introduce some strict reforms to check the operation of commercial banks and financial institutions in the country.
These reforms will be part of a corporate governance exposure guidelines to help enhance and protect investments in the financial sector.
The Second Deputy Governor of the Central Bank, Dr. Johnson Asiama, at the launch of a partnership between the Bank of Ghana and the International Financial Corporation (IFC); geared at improving corporate governance, revealed some critical aspects of the draft document.
(i) The tenure of CEOs will be capped at a maximum of three terms of 5 years per term;
(ii) 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;
(iii) At the minimum, every bank shall have at least two Board sub-committees, Audit and Risk committees.
(iv) The Risk and Audit committees shall be chaired by a Non-Executive Director;
(vi) In the case of foreign banks, the positions of Managing Director and Board Chair cannot be occupied concurrently;
(vii) Competencies for board membership shall be explicitly defined in accordance with Basel requirements;
(viii) The size of bank Boards shall be limited, as well as the retiring age for Directors prescribed;
(ix) Disclosure of attendance at Board meetings by Directors in annual accounts;
(xi) Additional directorship engagement will be limited to no more than five (5);
(xii) Evaluation of individual Director’s performance and collective performance by external agents;
(xiii) A cooling-off period for Directors switching jobs in the industry.
These are about a few of the governance reforms that will be adopted in the industry once the Guidelines are issued.
Dr. Asiama added: “Recognising the centrality of risk management and compliance systems in corporate governance frameworks, the Bank of Ghana is also reviewing its Risk Management Guidelines for adoption. Revised exposure draft would also be circulated once consultations have been held with industry and the Ghana Association of Bankers.”
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(Via: NewsGhana)
