“Political” board appointments hurting SOEs – Institute of Directors boss
President of the Institute of Directors-Ghana, Frederick Ofosu Darko, has said the situation where boards of state-owned enterprises are replaced en masse once political power changes hands in the country truncates their long-term objectives, and must be checked.
His comments follow a revelation by Vice President Dr. Mahamadou Bawumia that a recent report by the Finance Ministry covering about 18 SOEs shows a net loss of GH¢791 million despite loans and financial support given them.
Mr. Darko argues that most of the inefficiencies in SOEs can be blamed on various boards controlled by the government, hence, the need for a paradigm shift in the appointment of board members.
“You realise that when one government takes over, all boards and CEOs are dissolved or sent away and new ones are appointed. This truncates the long-term strategies of the organisations and it is hurting them. In other words, SOEs are not given the opportunity to pursue their long-term objectives.
So, I am suggesting that power is delegated to an agency or a policy or guideline be introduced… for the appropriate or right people to serve on the boards so that the future is not truncated and the right people will be selected to run the SOEs,” he said at the Canada-Ghana Chamber of Commerce breakfast meeting in Accra themed: ‘Corporate Governance and Compliance’.
Mr. Darko further suggested that there is a need for board members, both in the private and public sectors, to undergo training in order to fully equip them with the knowledge on duties and responsibilities of serving on a board.
Also speaking at the event, Managing Partner of Kimathi and Partners, Kimathi Kuenyehia, highlighted the need for both public and private sectors to embrace a new culture in their organisations, saying, poor organisational culture makes it difficult for proper and good corporate governance systems to be instituted.
Following the collapse of the UT and Capital Banks, the issue of poor corporate governance in both public and private organisation in the country has gained currency in recent times, with experts calling for serious attention to be paid to the situation.