Invest in corporate governance … ACCA
The country remains an attractive investment destination except that serious attention must be paid to corporate governance in the private sector, Doris Yaa Aggrey Ahiati, Head, Association of Chartered Certified Accountants (ACCA) has observed.
Ghana, as part of the emerging markets, she said, “Is an attractive investment destination. But that notwithstanding, investors who are looking at coming into the country require certain governance systems and framework to be in place before they will put in their money,” adding that unfortunately, “such governance practices are ignored by most businesses.”
Mrs. Ahiati said this in Accra at a corporate governance forum, organised by ACCA and the International Financial Corporation (IFC) of the World Bank Group, on how to build confidence in the private sector through corporate governance practices.
She explained that majority of companies, especially small and medium-sized enterprises, do not appreciate governance practices, hence remain stagnant, or fold up in the long-run.
“We have a few companies that can be singled out as having good, or fairly decent corporate governance regimes, but the majority of the companies; about 80 to 90 percent as you know, fall in the SME bracket and are typically those that are found wanting when you are assessing their corporate governance policies.
We may have started as a single owner managed company, but it is important to entrench good corporate governance in order to create enduring businesses that can stand the test of time,” she said.
In the face of the tightening credit situation in the country, Mrs. Ahiati believes that adhering to governance practices in particular, could help a lot of businesses attract the much-needed funds, as it sends a positive signal to investors.
Commenting on how to imbibe good corporate practices, she advocated that: “In most cases, we need a compliance monitoring officer to ensure that that you are adhering to the corporate governance practices that you have.”
Apart from that, she said it is also important for businesses to have in place a board of directors, capable of driving the company’s growth, with informed advice and business connections.
“Good corporate governance is very important to accessing capital in the fact that whoever is going to provide that capital is interest in in knowing how you running your organisation,” she added.
Edward Effah, Founder and Board Chairman of Fidelity Bank, also reiterated that corporate governance is in a lax mode in the private sector.
“Governance of private companies is more important than the governance of a country, and we need to take it seriously, because at the end of the day if the private sector performs well then, the government too becomes wealthy --- we are a reflection of the Ghana government,” Mr. Effah noted.