The National Corporate Governance Code – which seeks to serve as a comprehensive convergence document for the different currently existing industry and sector-specific governance standards, and to promote the highest level of sound corporate governance in the country – has been launched.
The move, culminating a year of efforts spearheaded by the Institute of Directors-Ghana (IoD-Gh) and Bank of Ghana (BoG), sees Ghana become the 21st country on the continent to introduce a national code.
Delivering keynote remarks at the event, which had as its theme ‘Consolidating the Foundation of Corporate Governance in Ghana’, Vice President Dr. Mahamudu Bawumia – who was represented by the Minister for Public Enterprises, Joseph Cudjoe, said the document stands out as it places an emphasis on the informal sector.
He said this is critical, owing to the enormous contribution provided by the sector to the economy, with approximately 90 percent of businesses in the country being Small and Medium-sized Enterprises (SMEs) which account for some 60 percent of the nation’s Gross Domestic Product (GDP).
“The discourse around corporate governance is almost always centred around large corporations, particularly those listed on the exchanges and state enterprises – yet we know that informal businesses are the backbone of the Ghanaian economy… I therefore commend the drafters for having thought outside the box to ensure the Code we are launching addresses the entirety of corporate governance exigencies pertaining to all businesses, entities and institutions operating in the economy,” Dr. Bawumia elaborated.
He also stated that a robust implementation of the Code will prove critical in enhancing the nation’s appeal as an investment destination, particularly in light of the African Continental Free Trade Area (AfCFTA), accelerating attainment of the 17 Sustainable Development Goals (SDGs) and bringing to fruition the Ghana Beyond Aid vision, as well as Africa’s Agenda 2063.
“The Code demonstrates the critical functions that organisations such as IoD Ghana can perform toward the development of industry self-regulation… I would also like to take this opportunity to encourage other professional organisations and non-state bodies to take a cue from this exercise and play an active role in developing similar standards in their respective professional spheres,” he added.
On his part, the president of IoD-Gh, Rockson Dogbehah, stated that the Code was born out of a desire to eliminate lack of coherence in the nation’s approach to corporate governance, which he said gives opportunities for significant lapses and leads to corporate failures with long-lasting implications.
He is optimistic that the 380-page document, in addition to the IoD-Gh Directors’ bill that’s on its way to Cabinet, will usher-in an era of shared prosperity.
Mr. Dogbehah however stressed the need for a collective effort to ensure success for the IoD’s endeavours.
“What we need now is commitment to effective and ethical leadership that ensures delivery of good governance, and this will be achieved by mass-training directors in use of the Code,” he said.
He also suggested that education and sensitisation on the necessity of good corporate governance must be introduced at the pre-tertiary level.
A corporate governance expert at the Continental Secretariat of the African Peer Review Mechanism (APRM) and Chairperson of the Committee on African Principles and Guidelines on Corporate Governance, Tumi Dlamini, commended the stakeholders for adopting a framework that takes into consideration peculiarities of the local context.
Chair of the Drafting Committee, Professor Collins Ntim, believes the Code will be useful for forestalling lapses in corporate governance, as witnessed during the financial sector clean-up and in attracting much-needed Foreign Direct and Portfolio Investments.
The third-leg of the rapidly-advancing ESG architecture, an enhanced corporate governance ecosystem, will be essential in attracting ESG-leaning funding – which is expected to reach US$34trillion by 2026.