BoG Urges Bank Boards to Strengthen Oversight to Avert Systemic Risks
Bank boards have been cautioned to reassess their role in safeguarding Ghana’s financial system or risk triggering economy-wide consequences, as the country seeks to consolidate gains made after the 2017 financial sector clean-up.
According to the Special Advisor on Corporate Governance at the Bank of Ghana (BoG), Sandra Thompson, stronger and more effective board oversight is critical to preventing a repeat of the failures that necessitated the costly reforms nearly a decade ago.
Speaking at the Corporate Governance Series organised by Corporate Secretariat and Training Services Limited, Ms. Thompson said the responsibilities of bank boards now extend far beyond internal performance and profitability considerations.
“Their decisions shape not only institutional performance and resilience, but public confidence and market trust,” she stated.
Ghana’s financial sector clean-up, which commenced in August 2017, led to the revocation of licences of nine universal banks, 347 microfinance companies, 39 microcredit firms, 15 savings and loans companies, eight finance houses and two non-bank financial institutions. The exercise cost the taxpayer more than GH¢20 billion.
Ms. Thompson, who is also an Adjunct Lecturer at the GIMPA Law School, argued that the governance environment has fundamentally changed, with boards now expected to play a broader systemic role.
“Bank boards are no longer seen as stewards of individual banks, but guardians of financial stability,” she said, adding that “the board’s decisions, or failures to act, can have economy-wide consequences.”
She noted that modern boards operate at the intersection of strategy, risk, governance and accountability, stressing that while boards are not responsible for day-to-day management, they must exercise informed judgement, particularly in periods of uncertainty.
With financial innovation accelerating and cross-border banking activity expanding across West Africa, Ms. Thompson said effective board oversight has become a key stabilising force in sustaining public trust in the financial system.
“The question before us is not whether boards matter for financial stability, but how boards must evolve in composition, capability, mindset and practice to meet today’s realities,” she said.
The Corporate Governance Series brought together regulators, governance experts and industry leaders to discuss ways of strengthening board effectiveness within Ghana’s evolving financial ecosystem.
Participants included the Head of Banking Supervision at the Bank of Ghana, Ismail Adam; Chief Executive Officer of the Ghana Association of Banks, John Awuah; and Executive Head of Retail Banking at GCB Bank, Sina Kamagate, who shared insights on improving governance standards and oversight in the banking sector.
