Corporate Governance: Obey BOG’s directives to be in good standing- Absa Bank COO to Banks
Chief Operations Officer Absa Bank Ghana, Michael Mensah-Baah has asked banking sector players to strictly comply with directives from regulators of the financial sector.
Speaking via zoom during UPSA Quarterly Banking Roundtable on Thursday 15 July 2021, Chief Operations Officer- Absa Bank Ghana Mr. Mensah-Baah said “the lack of adherence to regulatory directives lead to the failure of corporate governance. Clearly, not all banks were affected by the clean-up exercise and those that were affected where does that were having challenges with corporate governance and financial performance”.
According to Mr. Mensah-Baah, financial performance can only work perfectly when there are strong governance structures available at the various banks.
Mensah-Baah noted that “The changes on the board with regards to numbers and tenure of office is very necessary because it helps you discover imbalances in order to neutralize them. It also ensures new members are on board with new ideas and expertise to complement the already existing ideas of the old board members”
The Absa Bank Ghana
Chief Operations Officer Michael Mensah-Baah has also wants book runners of banks to set standards that remain a shining examples to followers to emulate whilst ensuring that those who breach rules are not left off the hook.
“Changing culture must be done continually. Key management personnel must set good examples for others to follow.
Good culture and practices must be rewarded and bad culture practices must be punished”, he said.
Since 2017, Ghana has recorded a shake-up in the banking sector, referred to banking sector cleanup exercise to fix problems facing the country’s financial regime. As a result, licences of 9 commercial banks, 2 finance houses, 386 microfinance and micro credits companies, 53 fund managers, 23 savings and loans firms as part of the banking sector clean-up exercise due to breaches of Act 930, severe impairments of their capital and inability to meet the regulator’s new minimum capital.
Meanwhile, Official of Institute of Directors-Ghana Emmanuel Yao Klinogo wants banks to employ competent persons whilst taking urgent steps to correct long existing but unacceptable practices to escape future shake-ups in the banking sector. According to him, most of the changes that took place in 2018 are changes that occurred about 20 years ago. In view of this, Mr. Klinogo believes it is necessary to take measures to avoid meeting those challenges that accounted for changes in the banking sector in future by putting the right people on the job.
Mr. Klinogo noted “Corporate governance is not only about the board, audit functions and structures available are also essential. we must solve the problems with selection during recruitment and placement”.
For Mr. Klinogo, “We must change the mindset of people we put in the bathrooms and we can only do this when there exists a structure that institutes or implant in these people the competence needed for the job, In the end, whatever policies or directive we have issued must be supported or complemented by ethics, integrity and professionalism and we can only do this through diversity expertise and knowledge”.
He is of the view that “We must change the mindset of board members to be responsible and treat the business like they will treat their own through character training in schools. Reward must be given to good and honest directors”, he said.