By Joshua Worlasi AMLANU
[email protected] / [email protected]
In compliance with regulatory requirements, companies listed on the Ghana Stock Exchange (GSE) and other financial institutions are releasing their financial statements for the 2024 reporting year.
However, beyond regulatory obligations, transparent financial disclosure is crucial for maintaining investor trust, which has never been more critical.
With economic challenges such as inflationary pressures, exchange rate volatility, and shifting market conditions, investors are scrutinizing corporate reports more closely than ever.
To sustain confidence, attract capital, and ensure long-term success, businesses must go beyond merely publishing annual reports and holding Annual General Meetings (AGMs). Proactive and continuous investor engagement is essential, providing deeper insights into financial stability, risk exposure, and growth prospects.
To foster trust and remain competitive, companies must ensure financial disclosures are not only timely, accurate, and comprehensive but also backed by strong board oversight that upholds ethical governance and accountability.
Beyond regulatory compliance, businesses should actively engage investors through open communication platforms such as the Ghana Stock Exchange’s ‘Facts Behind the Figures’ series, transparent ESG reporting, and sustainable corporate strategies. These initiatives will reinforce investor confidence and contribute to a more resilient capital market.
Transparency in Financial Disclosures
Financial transparency is the cornerstone of investor confidence. When companies provide clear, accurate, and timely information, they empower investors to make informed decisions and mitigate uncertainties. Both institutional and retail investors seek assurance that their capital is managed prudently and that companies adhere to robust governance principles.
In Ghana, regulatory frameworks emphasize financial transparency. The Securities and Exchange Commission (SEC) mandates that issuers and market operators submit audited annual financial statements within three months of their financial year-end. This ensures investors have access to up-to-date financial information, fostering trust and accountability.
To further enhance transparency, the Ghana Stock Exchange (GSE) has introduced an Environment, Social, and Governance (ESG) manual. Developed in collaboration with industry partners, this guide helps companies collect, analyze, and publicly disclose essential ESG information. The initiative aligns with international sustainability reporting standards and meets growing investor demand for comprehensive corporate disclosures.
With institutional investors prioritizing financial transparency in their investment decisions, listed companies must go beyond regulatory compliance by adopting enhanced disclosure practices. Proactive transparency not only strengthens investor confidence but also reinforces corporate credibility, ensuring long-term sustainability in Ghana’s capital markets.
Best Practices in Financial Disclosure
Effective financial disclosure is fundamental to investor confidence and corporate transparency. Companies must prioritize timely and consistent reporting, as delays can erode trust and create market uncertainty. By committing to prompt and clear disclosures, businesses reinforce their accountability and credibility.
Even while adhering to International Financial Reporting Standards (IFRS), companies should ensure their reports remain accessible. Overly complex financial statements can alienate investors who lack deep financial expertise. To enhance clarity, businesses can supplement detailed reports with simplified summaries, investor presentations, and explanatory notes.
Transparent disclosure of financial risks and contingencies is equally crucial. Investors value candid assessments of vulnerabilities such as foreign exchange exposure, debt obligations, and operational risks. Providing clear risk mitigation strategies reassures stakeholders and strengthens market confidence.
In Ghana, the Ghana Stock Exchange (GSE) promotes transparency through initiatives like the “Facts Behind the Figures” series, where listed companies present financial results and strategic plans to investors, analysts, and the media. In 2024, participating companies included GCB Bank PLC, Scancom PLC (MTN Ghana), Bayport Savings and Loans PLC, Guinness Ghana Breweries Plc, and CalBank PLC. These engagements offer investors deeper insights into corporate performance and market outlooks.
However, these companies represent only a fraction of the firms listed on the GSE. While their commitment to investor engagement is commendable, broader adoption of transparent financial disclosures and proactive investor communication across all listed entities would further enhance market confidence and deepen trust in Ghana’s capital markets.
Madeline Netty, CEO of Republic Investments, in an interview acknowledged the importance of such initiatives but believes they should be expanded and made mandatory for all listed firms.
“The GSE has a ‘Facts Behind the Figures’ session that allows corporates to explain their performance or initiatives to the market,” she said. “Unfortunately, it’s not mandatory, so issuers choose whether to participate, and the frequency is entirely at their discretion. We may need to advance this by making it a requirement for all listed companies to regularly engage with the market.”
While regulatory frameworks allow companies to issue press releases on corporate developments, these may not always be effective in reaching investors.
“Press releases are done, but typical of us, people don’t read. So even though these disclosures exist, they may not get the attention they deserve. On the other hand, more interactive engagements—where companies actively communicate with investors—are much more impactful,” she explained.
Although regulators are making efforts to strengthen investor relations, additional steps may be necessary to encourage greater corporate participation in transparent financial communication.
“We probably need to re-look at those engagements that are not mandatory and find ways to encourage more issuers to put themselves out there,” Ms. Netty noted.
While some leading firms on the GSE have adopted robust financial disclosure practices, the broader market would benefit from increased transparency across all listed companies. Strengthening financial reporting frameworks, making investor engagements more structured, and ensuring that companies are proactive in communicating with stakeholders will enhance trust, attract more capital, and deepen Ghana’s capital markets.
Corporate Governance as a Pillar of Investor Trust
Strong corporate governance is essential for long-term business sustainability and investor confidence. Companies that uphold sound governance principles foster trust, attract investment, and mitigate financial and operational risks.
Governance failures have led to major corporate collapses globally, and Ghana has not been immune. The failure of several banks and financial institutions in recent years underscored the dangers of poor governance, weak risk management, and opaque financial reporting. These crises eroded investor confidence and triggered regulatory interventions to restore stability.
In Ghana, corporate governance for listed companies is guided by the Ghana Stock Exchange Listing Rules, the Securities and Exchange Commission (SEC) guidelines, and the Companies Act of Ghana (2019). These regulations set minimum standards for board composition, financial reporting, risk management, and shareholder engagement.
However, best practices in governance go beyond regulatory compliance. Companies that implement independent board oversight, robust internal controls, transparent executive compensation, and ethical business practices position themselves as leaders in corporate governance, reinforcing investor trust and securing long-term market credibility.
Active shareholder engagement is a critical component of corporate governance. Companies should maintain open communication with investors through AGMs, investor conferences, and digital engagement channels. Such interactions strengthen transparency, accountability, and investor confidence in corporate decision-making.
Case Study: MTN Ghana’s Investor Relations Strategy
MTN Ghana has set a benchmark for financial transparency and proactive investor engagement, reinforcing strong market confidence. Demonstrating a commitment to transparency, MTN Ghana consistently publishes its financial statements ahead of regulatory deadlines. The company complements these disclosures with investor briefings and Q&A sessions, providing stakeholders with deeper insights into its financial performance and strategic direction. Such proactive engagement fosters trust and enhances investor confidence.
MTN Ghana has also embraced integrated reporting, combining financial disclosures with environmental, social, and governance (ESG) metrics. This approach aligns with the growing investor preference for sustainability-driven investments. By integrating ESG considerations into its reporting framework, MTN Ghana not only strengthens corporate accountability but also positions itself as a responsible market leader.
On March 3, 2025, MTN Ghana’s stock reached a record high of GH¢3.02 per share, rising from GH¢2.91 the previous week. This 114% increase from its GH¢1.40 low a year ago reflects positive investor sentiment, with a 36.4% gain in the past six months and a 20% rise since the start of 2025.
The rally followed MTN Ghana’s February 28 earnings report, which showed a 34.5% rise in service revenue for 2024. The company attributed this growth to higher data consumption, the continued expansion of mobile money (MoMo) services, and strategic investments in network infrastructure.
Conclusion
Building investor trust requires more than just regulatory compliance; it demands a commitment to transparency, proactive financial disclosure, and strong corporate governance. Companies that prioritize timely reporting, clear risk communication, and open engagement with investors enhance market confidence and attract long-term investment.
While initiatives like the Ghana Stock Exchange’s “Facts Behind the Figures” series and regulatory frameworks promote transparency, broader adoption of best practices across all listed firms is necessary to deepen trust in Ghana’s capital markets. MTN Ghana’s success in financial disclosure and investor relations serves as a model for other companies, demonstrating how proactive engagement can drive investor confidence and stock market performance.
