- BoG highlights the importance of corporate governance
- It aims to ensure a strong and stable financial sector
- It nsures those in key positions meet specific criteria
The Bank of Ghana (BoG) issued a reminder to banks, specialized deposit-taking institutions (SDIs), and the public. They emphasized that certain individuals are not eligible for key positions in financial institutions.
Who is Ineligible?
- People directly involved in the 2017-2019 financial sector clean-up
- Former directors of failed banks and SDIs since the Banks and Specialised Deposit-Taking Institutions Act (Act 930) was enacted in 2016
Reasoning Behind the Reminder
The BoG highlights the importance of sound corporate governance in preventing excessive risk-taking. Weak governance practices were a major factor in the past failures of financial institutions, which led to the clean-up exercise.
Measures to Strengthen Governance
- Fit and Proper Persons Directive (2019): Ensures those in key positions meet specific criteria for qualifications and experience.
- Corporate Governance Directive (2018): Promotes strong corporate governance practices within financial institutions.
- Corporate Governance Disclosure Directive (2022): Improves transparency by requiring financial institutions to disclose their governance practices.
Key Qualities for Appointments
The BoG emphasizes that those in significant roles (directors, key management personnel, etc.) must have:
- A good reputation
- Sufficient knowledge, skills, and experience to fulfill their duties
Past Issues Considered
The Fit and Proper Persons Directive considers a person’s past involvement with companies or institutions that:
- Lost their license
- Are undergoing or have undergone court-ordered wind-up
- Entered receivership, insolvency, or involuntary liquidation
The Bank of Ghana aims to ensure a strong and stable financial sector by preventing individuals with concerning past experiences from holding key positions.
