BoG Mandates Annual Fit and Proper Assessments for Boards and Management of Financial Institutions
The Bank of Ghana (BoG) has directed all financial institutions to conduct annual fit and proper assessments for all board members and senior management, while insisting that such checks must also be completed prior to the appointment of any director or key management personnel.
The directive was disclosed during a questions-and-answers session on the Central Bank’s newly issued Guidelines on Fit and Proper Persons for Accountable Institutions.
According to the BoG, accountable institutions are required to undertake comprehensive due diligence as part of the assessment process, including the independent verification of all material information submitted by prospective and existing officers.
The Central Bank outlined a detailed list of documents to be provided for the assessment, including an application letter, updated curriculum vitae, completed personality note form, tax clearance certificate, certified financial statement of affairs, copies of academic and professional certificates, police report, enhanced due diligence questionnaire, and regulatory references covering a minimum of six years. Other required documents include bankruptcy or insolvency certificates, where applicable, as well as beneficial ownership disclosures for corporate entities.
Under the new framework, boards of accountable institutions are tasked with appointing suitably qualified directors and key management staff, conducting due diligence prior to all appointments, and establishing a robust fit and proper policy. Boards are also required to oversee assessments related to outsourcing arrangements and ensure the continued competence of board members and key personnel.
Key management, on the other hand, is responsible for conducting fit and proper assessments for middle and lower management, submitting assessment outcomes to the board, and ensuring annual reviews for heads of control functions such as Risk, Compliance, Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT), and Internal Audit.
The Bank of Ghana cautioned that where an individual is found not to be fit and proper, it may reject or revoke the appointment, or issue a prohibition order of up to 10 years, barring the individual from holding shares, serving as a director, or performing any key function within an accountable institution.
