Joseph Cudjoe, Minister of Public Enterprises, has cautioned Board of Directors of State-Owned Enterprises (SOEs) and entities against boardroom conflicts and indifference, saying they do collapse companies.
“When boardroom conflict drags on, the market will not wait for you and before you come back, your turnover will be shrinking.
“Decision making in the boardroom shouldn’t be driven by one’s feelings or emotions and Board of Directors and their entities shouldn’t find themselves in conflict with the market because that could be threatening to the company and the economy,” he said.
Cudjoe was addressing participants at “The Boardroom Governance Summit” in Accra by the State Interest and Governance Authority (SIGA), Ministry of Finance, Institute of Directors, Ghana.
It was on the theme: “Boardroom Governance, Accountability, and Sustainable Development: The Inextricable link.”
Some Board of Directors, he said, resorted to giving directions rather than developing strategies and bringing in cash flows.
“As a country, I think we are afraid of developing large corporates. In fact, we are afraid. I have witnessed others say, this company is becoming too big, if we are not careful it will become too powerful.
“As a country, we like making laws but we are not willing to comply with the laws because boardrooms don’t look at the direction of the laws since they don’t want to be restricted to do the right thing,” he said.
The Minister appealed that the right decisions were made in the boardroom, saying the growth of the economy was directly linked to the growth of the business enterprise.
Reverend Dr Angela Carmen Appiah, President, Institute of Directors Ghana, said Board of Directors as part of their responsibilities, provided strategic leadership, governed with principles, rules, frameworks and constitution of a jurisdiction, and ethics.
They also identified and managed risks to the company’s operations and ensured fiduciary duty (to act in the best interest of shareholders and stakeholders).
Directors were also expected to provide duty of care, avoid conflicts of interest and prioritise the company’s welfare, ensure compliance obligations to ensure the company followed corporate laws such as tax laws, employment laws and environment regulations.
They are also charged to promote transparency, sound financial management and review of company’s performance.
That notwithstanding, Dr Appiah said they faced varied liabilities and risks such as legal liabilities for breach of duty or failure to comply with legal requirements, and Fiduciary liabilities (failure to act in the best interest of the company).
She, therefore, advised that professionals made key considerations before accepting a role of a director, such as assessing the company’s health (financial standing and governance structure), and personal liability coverage to ensure it provided insurance for Directors and the office.
“Becoming a director carries significant burdens, responsibilities and risks, so please ensure that you fully understand the legal obligations and liabilities involved before joining the company. Also evaluate and assess yourself personally and professionally to be sure you are the right fit for the position and have time to work before you go for it,” she advised.
Dr Mohammed Amin Adam, Minister of Finance, said good governance was a means to improve development outcomes and called on Board of Directors to be vigilant when considering government’s proposals to undertake projects.
“Please make sure you do due diligence with your work and don’t leave government with contingent liabilities. Also make sure to commit to government’s work with good governance agenda,” he advised.
The Minister launched a book titled: “Practical Perspectives on Boardroom Governance” by Professor Douglas Boateng, an International Chartered Director, and a co-organiser of the summit, to guide Board members, Chief Executives and Chairpersons to promote good governance in institutions.
Professor Douglas Boateng said: “As leaders, we must accept some responsibility to enable us to confront some of the issues head-on; we must rise, we must learn, and we must accept that accountability is the key to progress to enable us to forge ahead with renewed vigour and purpose.”
Through effective boardroom governance and accountability, he said countries like China, the United States of America, Vietnam, Malaysia, Singapore, and South Korea among others had successfully used industrialisation to move millions out of poverty.
“Now, it’s our turn! It is the perfect time for Ghana and the rest of Africa to harness the transformative power of industrialisation to better the lives of its citizens,” he advised.
