Businesses advised on good corporate governance

BY: Victor Kwawukume
• Owusu Afari (left), former President of the Association of Ghana Industry, interacting with  Mr Andy Akoto (2nd right), Partner, Risk Consultant of KPMG at the African Corporate Governance meeting in Accra. Those in the picture are Mr John Klinogo (2nd left), Chief Executive Officer of John Kay & Co, Mr Kobby Andah (right), and Stephan Ata, both of the Bank of Africa. Picture: GABRIEL AHIABOR

Ghanaian businesses have been urged to inculcate good corporate governance into their operations in order to enhance their ability to attract better investment opportunities.

A Partner at KPMG Ghana, Mr Andy Akoto, who gave the advice said funds would only flow to countries or entities which were seen to have internationally accepted standards of corporate governance.

“The capability of a country or corporate entity to entice or attract capital providers is subject to the efficiency and effectiveness of its corporate governance practice,” Mr Akoto said. Mr Akoto was addressing a workshop for company directors in Accra.

The workshop was organised by the International Finance Corporation (IFC) under the Africa Corporate Governance Programme in conjunction with the Institute of Directors (IoD), Ghana.

The workshop sought to raise awareness of the concept and benefits of corporate governance, the individual roles of the director and how an effective board could collectively contribute to a sustainable economy.

Good governance structure

A good governance structure specifies the distribution of rights and responsibilities among different participants in the company and specifies the rules and procedures for making decisions in corporate affairs.

Mr Akoto said good corporate governance had a positive link to economic development and good corporate performance.

He said inculcating the principles of corporate governance would attract investors, both local and foreign, since they would have the assurance that their investment would be secure and efficiently managed in a transparent and accountable process.

“Investors are not willing to invest in countries or companies that are corrupt, prone to fraud, poorly managed and lacking sufficient protection for investors’ rights,” Mr Akoto stressed.

He said the securities and companies protection law might help but they were not enough and that corporate governance supplemented the legal framework.

Maintaining corporate integrity

Corporate governance, he said, also played an important role in maintaining corporate integrity and managing the risk of corporate fraud, combating against management misconduct and corruption.

Mr Akoto, therefore, urged Ghanaian businesses to incorporate corporate governance framework into their operations in order to ensure the strategic guidance of the company, the effective monitoring of management by the board, and the board’s accountability to the company, shareholders and other stakeholders.

The President of IoD, Mr Frederick Ofosu Darko, said the IoD and the IFC signed a co-operation agreement on October 19, 2015 to promote good corporate governance in Ghana.

He said the directorship was now a competence-based profession and, therefore, it was incumbent on all who were directors or aspiring to be directors to acquire knowledge and skills to enable them to perform to their best in the boardroom.

The Country Manager of IFC Ghana, Ms Ronke Amoni-Ogunsulire, said the IFC had invested more than USD 2.5 billion in Ghana because of the huge opportunities that abounded in the country.

He said the decision to place emphasis on improved corporate governance in Ghana was to improve the performance of firms and increase the ability of markets and firms to attract and retain investment.