Corporate Governance: BoG issues new directive for banks, SDIs, others
A new Corporate Governance Disclosure Directive (CGDD) for banks, savings and loans, finance houses and financial holding companies in the country has been issued by the Central Bank.
The new CGDD follows consultations with banks as well as stakeholder engagements with the Ghana Association of Bankers (GAB) and the Institute of Chartered Accountants Ghana (ICAG).
According to the Bank of Ghana, purpose of the revised CGDD is to enhance transparency, market discipline and accountability of financial institutions in the country.
The CGDD framework also serves as a barometer for stakeholders in assessment of the effectiveness of Corporate Governance practices by financial institutions.
The BoG said it has given the CGDD significant consideration in light of the comments, suggestions, and contributions received throughout the public consultation process.
Contained in the new Corporate Governance Disclosure Directive are relevant provisions such as the following:
Section 12 of the CGD requires:
(a) that within 90 days of the beginning of each financial year, the Board shall provide a certification in the Annual Report of the preceding year as to the compliance of the RFI or otherwise with the contents of this Directive. Additionally, the certification shall state that:
- the Board has independently assessed and documented whether the corporate governance process of the RFI is effective and has successfully achieved its objectives or otherwise; and
- Directors are aware of their responsibilities to the RFI as persons charged with governance.
(b) the Board shall report any material deficiencies and weaknesses that have been identified in the course of the year, along with action plans and timetables for corrective action by the Board to the BOG.
(c) Directors are required to obtain certification from the National Banking College or any other institution recognised by the BOG to the effect that they have participated in a Corporate Governance Programme and have completed a programme on directors’ responsibilities.
(2) In addition, other sections of the CGD require: (a) the Board to disclose in the corporate governance section of its Annual Report, the total number of Board meetings held in the financial year and the attendance by each director
(b) Directors’ other engagements to be disclosed in the annual accounts of the RFI
(c) a statement on the external evaluation of the Board to be included as a separate section of the Annual Report of the RFI every two years
(d) the Board to ensure that appropriate public disclosure on conflict of interest is made in the Annual Report
