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Corporate governance is the backbone of any well-functioning corporate entity. It is about how companies are directed and controlled, ensuring that decisions are made fairly, responsibly, and in the best interest of shareholders and stakeholders. In Ghana, strong governance has become more important than ever because of its direct link to investor confidence, business sustainability, and economic stability.
Why Corporate Governance Matters
Poor governance has in the past led to serious corporate failures, most notably during the 2017–2019 banking sector crisis (https://www.bog.gov.gh/wp-content/uploads/2019/07/Restoring-Confidence-and-Building-a-Resilient-Banking-System-for-Ghana.pdf), when several banks collapsed due to weak internal controls, regulatory breaches, and poor financial management. These events show that without accountability and transparency, businesses risk mismanagement and loss of trust. Good governance, on the other hand, creates confidence. It promotes ethical business practices, attracts investment, and helps businesses grow in a sustainable way.
The Regulatory Framework in Ghana
- The Companies Act, 2019 (Act 992) – Governs company operations, strengthens financial disclosure, and increases director accountability.
- The Securities Industry Act, 2016 (Act 929) – Regulates the securities market and protects investors.
- The Bank of Ghana's Corporate Governance Code 2018 – Promotes sound governance practices for banks, savings and loans companies, financial houses and financial holding companies.
- Ghana Stock Exchange (GSE) Listing Rules – Establish standards for companies listed on the exchange.
- The Public Financial Management Act, 2016 (Act 921) – Reinforces financial discipline across public institutions.
However, despite this regulatory framework, certain challenges remain. Enforcement has not always been consistent, and some companies struggle to fully comply due to capacity and resource constraints. Small and Medium-sized Enterprises (SMEs), in particular, often face difficulties in adopting governance best practices because of limited resources and technical expertise.
Issues such as conflicts of interest and lapses in transparency also present ongoing concerns. Addressing these areas through clearer guidelines, capacity-building initiatives, and stronger incentives for compliance could help reinforce ethical and legal standards across sectors.
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