12 June 2024

Corporate Governance Comparative Guide

Corporate Governance Comparative Guide for the jurisdiction of Ghana, check out our comparative guides section to compare across multiple countries
Ghana Corporate/Commercial Law
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1 Legal and enforcement framework

1.1 Which legislative and regulatory provisions and codes of practice primarily govern corporate governance in your jurisdiction?

The following instruments govern corporate governance in Ghana:

  • the 1992 Constitution;
  • various statutory acts, regulations, rules and laws such as:
    • the Companies Act 2019 (Act 992) (the "Companies Act 2019");
    • the Public Financial Management Act 2016 (Act 921);
    • the State Interest and Governance Authority Act 2019 (Act 990); and
    • the Corporate Insolvency and Restructuring Act 2020 (Act 1015);
  • sectoral corporate governance codes;
  • professional and private codes of conduct (eg, the Institute of Directors Code and the Professional Bodies Code); and
  • international codes of best practice.

In Ghana, the Companies Act 2019 is the principal law that governs the operations of companies and sets out the fundamental corporate governance requirements for companies.

Directives issued by other regulatory bodies also help to ensure corporate governance compliance in Ghana. These bodies include:

  • the Office of the Registrar of Companies ("ORC");
  • the Bank of Ghana;
  • the Securities Exchange Commission ("SEC"); and
  • the Ghana Standards Authority.

Other sectoral codes that govern corporate governance in Ghana include:

  • the SEC Code for Listed Companies (2020);
  • the Bank of Ghana Corporate Governance Directive (2018); and
  • the Bank of Ghana Corporate Governance Directive for Rural and Community Banks (2021).

1.2 Is the corporate governance framework in your jurisdiction primarily based on hard (mandatory) law and regulation or soft (eg, ‘comply or explain') codes of governance?

The corporate governance framework in Ghana combines both hard law and regulation with soft codes of governance.

The hard law establishes obligatory requirements that companies must observe, while the soft codes offer guidance and best practices for voluntary adoption. Under the ‘comply or explain' principle, companies have the flexibility to deviate from the codes but are obliged to provide explanations for their deviations. This approach promotes transparency and accountability within the corporate governance framework.

1.3 Which bodies are responsible for drafting and enforcing the rules and codes that make up the corporate governance framework? What powers do they have?

The drafting and enforcement of rules and codes on corporate governance are collective efforts that involve both statutory bodies and sectoral bodies. These include:

  • the ORC ;
  • the SEC;
  • the Ghana Stock Exchange; and
  • the Bank of Ghana.

The powers of these bodies include:

  • issuing regulations, guidelines and codes of conduct relating to corporate governance;
  • setting standards and requirements for listed companies;
  • monitoring compliance with corporate governance rules;
  • conducting investigations into alleged violations of corporate governance practices;
  • imposing sanctions, fines or other enforcement actions for non-compliance;
  • providing guidance and education on corporate governance best practices; and
  • collaborating with other stakeholders to promote good governance in the corporate sector.

2 Scope of application

2.1 Which entities are captured by the rules and codes that make up the principal elements of the corporate governance framework in your jurisdiction?

Pursuant to the Companies Act 2019, the following entities are governed by the corporate governance framework:

  • Shareholders: The rules address the rights and responsibilities of shareholders, which are the owners of the company.
  • Board of directors: The rules establish guidelines for the composition, roles, responsibilities and duties of the board.
  • Management: The rules address the relationship between the board and management.
  • Auditors: The rules establish the requirements for:
    • appointing auditors;
    • ensuring their independence; and
    • providing oversight.
  • Regulators: Regulators such as the following set standards and guidelines for corporate governance and have powers to investigate and impose penalties for non-compliance:
    • the ORC ;
    • the Bank of Ghana;
    • the SEC ;
    • the Ghana Standards Authority; and
    • the Environmental Protection Authority.
  • Stakeholders: The rights and interests of stakeholders such as employees (through the labour unions), customers and clients, and interested professional groups (eg, the Institute of Directors-Ghana) are also considered and protected.

2.2 What exemptions, if any, from the principal elements of the corporate governance framework are available in your jurisdiction?

In Ghana, there are no exemptions from the principal elements of the corporate governance framework.

2.3 What are the principal issues covered by the codes of governance in your jurisdiction?

The codes of governance in Ghana vary depending on the sector or industry involved. The principal issues covered are as follows:

  • board composition, board structure and the roles and responsibilities of the chairperson and board members;
  • shareholder rights and protection;
  • disclosure and transparency, including:
    • the timely disclosure of financial and non-financial information to shareholders; and
    • management reporting to board members, stakeholders and the public (for listed companies);
  • risk management and internal controls;
  • sustainability and corporate social responsibility; and
  • compliance with laws, regulations and best practices.

3 Ownership and control

3.1 What are the typical ownership structures in your jurisdiction?

Companies in Ghana can adopt various ownership structures, depending on factors such as size, nature and legal requirements.

The typical ownership structures include the following:

  • Sole proprietorship: This structure involves a business which is owned and operated by a single individual who assumes full control, risks and liabilities. It is often governed by the Registration of Business Names Act, 1962 (Act 151).
  • Partnership: Partnerships are formed when two or more individuals or entities jointly establish a business. Partners share responsibilities, risks and profits based on the terms of their partnership agreement. The primary law governing this type of ownership structure is the Incorporated Private Partnership Act, 1962 (Act 152).
  • State-owned enterprises: These companies are majority owned or wholly owned by the government of Ghana. They operate in various sectors and are subject to specific regulations.
  • Companies: These can be categorised as private companies or public companies. The ownership of private companies takes the form of either:
    • individual Ghanaian ownership; or
    • corporate ownership by way of a joint venture or wholly foreign ownership.
  • Public companies are owned by their shareholders. Companies are also regulated by the Companies Act 2019 and the Ghana Investment Promotion Centre Act 2013 (Act 865).

3.2 How are companies typically controlled in your jurisdiction, both structurally and in practice?

Structural mechanisms:

  • Board of directors: The board of directors is responsible for the overall governance and control of the company. The board:
    • provides checks and balances;
    • ensures accountability; and
    • safeguards the interests of stakeholders.
  • Board secretary: The board secretary is responsible for:
    • advising the board on all corporate governance-related matters; and
    • ensuring that the board adheres to the governance framework of the company and filing requirements under the law.
  • Shareholders: Shareholders exercise control by:
    • electing directors;
    • voting on important matters; and
    • approving key decisions, such as changes to the company's constitution, major transactions or the appointment of auditors.
  • Regulatory bodies: Regulatory bodies such as the ORC oversee and enforce compliance with laws, regulations and codes of corporate governance. They play a crucial role in ensuring that companies adhere to governance standards and fulfil their legal obligations.

Practical measures:

  • Executive management: Company control is exercised through the executive management team led by a chief executive officer or managing director. They are responsible for:
    • the day-to-day operations;
    • the implementation of strategic decisions; and
    • the achievement of business objectives.
  • Effective management practices, performance monitoring and accountability mechanisms are vital to ensure proper company control.
  • Internal control systems: Companies establish internal control systems to ensure the effectiveness and efficiency of operations, safeguard assets and mitigate risks. These include:
    • internal audit functions;
    • financial controls;
    • risk management processes; and
    • compliance procedures.

4 The board: structure and appointment

4.1 How is the board typically structured in your jurisdiction?

The structure of the board is a single-tier structure. This means that there is a single board of directors that makes decisions for the company.

The board of directors consists of executive and non-executive directors. An executive director is a director who is actively involved in the day-to-day management of the company; whereas a non-executive director is a director who is not involved in the management of the company.

The board of directors must have at least two directors, at least one of whom must be ordinarily resident in Ghana. This means at least one director must permanently reside in Ghana at all times. The constitution of the company can determine the number of directors that the company should have.

4.2 Are board committees recommended or mandated? If so, which areas should/must they cover?

Board committees are not mandated by the Companies Act 2019 and it is left to the discretion of the board to decide to set up a board committee.

The Companies Act 2019 provides that the board may establish committees consisting of members of the board or non-members or both to perform a function. A board committee composed of non-members of the board is advisory only.

A board may have permanent standing committees. These committees aid the board with final decision making by making recommendations to the board.

Committees are mandated by terms of reference which set out the purpose, conduct, procedures, quorum and obligations of the committee during its subsistence. They usually take the form which is necessary for implementation of board decisions. Examples of such committees include:

  • the legal, compliance and governance committee;
  • the finance and risk committees;
  • the human resources and administration committee; and
  • the technical operations committee.

The Public Finance Management Act 2016 (Act 921) mandates state-owned entities to form an audit committee with representatives from the Internal Audit Agency along with board members for the purpose of reviewing periodic audits for submission to the auditor general and the president.

Pursuant to the Companies Act 2019, a person is not entitled to assume that a member of a committee of the board of directors has the authority of the company solely because the constitution of the company provides for this.

4.3 Are there any requirements or recommendations to appoint independent board members? If so, how is ‘independence' defined?

In Ghana, the principal guidelines for independent board members can be found in the Corporate Governance Code issued by the SEC and the Institute of Directors-Ghana.

The definition of ‘independence' for board members generally includes the following key criteria:

  • Non-executive role: Independent board members should not be involved in the day-to-day operations of the company. They should not hold any executive management positions or have any other conflicts of interest that may compromise their ability to exercise independent judgement.
  • Financial interest: Independent board members should not have a significant financial interest in the company or its subsidiaries. The specific thresholds or limits for determining significant financial interest may vary, but the intention is to prevent personal financial interests from unduly influencing their decision making.
  • Affiliation: Independent board members should have no significant affiliation or close relationships with the company, its management or major shareholders that may compromise their objectivity or independence. This includes avoiding familial, professional or business relationships that could create conflicts of interest.
  • Employment history: Independent board members should not have been employed by the company or its subsidiaries within a specified period. The timeframe can vary but is typically set to ensure that prior employment does not compromise their independence.
  • Other connections: Independent board members should have no other significant business relationships, contractual arrangements or associations with the company or its management that may compromise their independence or create conflicts of interest.

4.4 Do any diversity requirements or recommendations apply with regard to board composition?

There are no diversity requirements or recommendations with regard to board composition.

However, pursuant to the 1992 Constitution, the highest law of Ghana, all persons are equal before the law and a person must not be discriminated against on grounds of:

  • gender;
  • race;
  • colour;
  • ethnic origin;
  • religion;
  • creed; or
  • social or economic status.

This applies in all aspects of life and as such can be applied to board composition.

4.5 How are board members selected and appointed? What selection criteria (if any) apply in this regard?

The constitution of a company may provide for the appointment of a director as stated by the Companies Act 2019. The first directors of the company are named in the application to the ORC for the incorporation of a company. After incorporation, subsequent directors are appointed by ordinary resolution of the company in a general meeting, upon giving their written consent.

A casual vacancy on the board of directors may be filled by:

  • the continuing directors or director; or
  • an ordinary resolution of the company in a general meeting.

However, the following persons are not qualified to be appointed or act as board members under the Companies Act 2019:

  • infants;
  • persons adjudged to be of unsound mind;
  • bodies corporate;
  • persons who are prohibited from being a director or promoter, or taking part in the management, of a company as a result of an order made by the court under Section 177; and
  • undischarged bankrupts.

The Companies Act 2019 also sets out the following criteria that disqualify persons from being appointed as directors:

  • A person has been convicted, whether in Ghana or elsewhere, of:
    • an offence involving fraud or dishonesty;
    • an offence in connection with the promotion, formation or management of a body corporate;
    • an offence involving insider dealing; or
    • any other criminal offence which is not a misdemeanour;
  • A person has been declared bankrupt in Ghana or elsewhere;
  • A person has been found culpable, whether convicted or not, or:
    • a criminal offence in relation to a body corporate; or
    • fraud or breach of duty in relation to a body corporate;
  • A person has been debarred by the competent authority from being a member of a recognised professional body as the result of a disciplinary inquiry; or
  • An investigation by a criminal investigating body or by the ORC or a foreign counterpart is ongoing.

4.6 How are board members removed?

The Companies Act 2019 sets out the procedure for the removal of a director of a company by ordinary resolution at a general meeting. This will apply regardless of any provisions in the constitution of that company or any agreement with a director.

However, a resolution to remove a director may not be moved at a general meeting unless notice of the intention to move the resolution is given by the company both to the members and to the director to be removed at least 35 days before the meeting at which the resolution is to be moved. The director to be removed must be given:

  • the right to send a written statement responding to the resolution prior to the meeting; and
  • the right to be heard on the resolution at the meeting.

Removal does not deprive a director who has a service agreement with the company of the right to:

  • compensation to which he or she may lawfully be entitled under that agreement upon termination of the directorship; or
  • damages if the removal from the directorship constitutes a breach of the service agreement.

4.7 Do any tenure restrictions or recommendations apply to individual directors?

There are no tenure restrictions for individual directors. The tenure for individual directors differs for each company.

4.8 What best practice is recommended when composing the board and appointing board members?

When composing the board and appointing board members, the following best practices are recommended for consideration to ensure that an effective and well-rounded board is appointed.

Personal characteristics:

  • Integrity and accountability:
    • High ethical standards;
    • Integrity and strength of character in personal and professional dealings; and
    • A willingness to act on and be accountable for their decisions.
  • Informed judgement:
    • Intelligence, wisdom and thoughtfulness in decision making; and
    • A willingness to thoroughly discuss issues, ask questions, express reservations and voice dissent.
  • Financial literacy:
    • A basic ability to read and understand balance sheets, income and cash-flow statements; and
    • An ability to understand financial ratios and other indices for evaluating company performance.
  • Confidence:
    • Assertive, responsible and supportive in dealing with others;
    • Respectful of others;
    • Open to other opinions; and
    • Willing to listen.
  • High standards: A history of achievements that reflect high standards for themselves and others.

Core competencies:

  • Accounting and finance:
    • Experience in financial accounting and corporate finance, especially with respect to trends in debt and equity markets; and
    • Familiarity with internal financial controls.
  • Business judgement:
    • A record of making good business decisions; and
    • Evidence that duties will be discharged in good faith and in a manner that is in the best interests of the company.
  • Management:
    • Experience in corporate management; and
    • An understanding of management trends in general and in the areas in which the company conducts its business.
  • Crisis response: The ability and time to perform during both short-term and prolonged crises.
  • Industry/technology: Unique experience and skills in the area in which the company conducts its business (eg, science, manufacturing or technology relevant to the company).
  • Leadership:
    • Understanding and possession of leadership skills; and
    • A history of motivating high-performing, talented managers.
  • Strategy and vision: The skills and capacity to provide strategic insight and direction by:
    • encouraging innovation;
    • conceptualising key trends;
    • evaluating strategic decisions; and
    • challenging the company to sharpen its vision.

Commitment to the entity:

  • Time and effort:
    • Willingness to dedicate the time and energy necessary to satisfy the requirements of the board and board committee membership;
    • Commitment to attend and participate in all board meetings and meetings of board committees of which they are a member;
    • Willingness to attend all annual shareholders' meetings;
    • Willingness to prepare prior to each meeting and to actively participate in the meeting; and
    • Willingness to make themselves available to management upon request to provide advice and counsel.
  • Awareness and ongoing education: Broad knowledge, or willingness to develop broad knowledge, of both:
    • critical issues affecting the company (including industry, technology and market-specific information); and
    • directors' roles and responsibilities (including the general legal principles that guide board members).
  • Other commitments: In light of their other existing commitments, the ability and willingness to perform adequately as a director, including preparation for and attendance at board meetings and annual shareholders' meetings.

Team and company considerations:

  • Balancing the board: Directors should contribute talents, skills and experience that the board needs as a team to supplement its existing resources and provide talent for future needs.
  • Diversity: Directors should contribute to the board in a way that can enhance perspectives and judgement through diversity in:
    • gender;
    • age;
    • ethnic background;
    • geographical origin; and
    • professional experience (public, private and non-profit sectors).

5 The board: role and responsibilities

5.1 What are the primary roles and responsibilities of the board?

Under the Companies Act 2019, the board:

  • has ultimate responsibility for the company's performance;
  • must act in the best interests of the company; and
  • is fully accountable to the shareholders and other stakeholders.

The board's duties include statutory duties and other duties of performance. The duties of board members may be summarised as follows:

  • Act honestly and in good faith in the interests of the company;
  • Avoid actual or potential conflicts of interest and duty;
  • Disclose fully and fairly any interest in a transaction involving the company;
  • Comply with all obligations attributable to the board under the Companies Act 2019, such as:
    • showing utmost honesty and loyalty in transactions involving the company due to the fiduciary relationship between the company and directors;
    • preserving assets, advancing business and upholding the board's mission to benefit the company's overall wellbeing;
    • considering the long-term consequences of choices, the company's impact on community and environment and how best to maintain a strong business reputation;
    • considering employees' and members' interests when making decisions, especially when representing a specific group.
    • staying independent in decision making;
    • avoiding conflicts of interest and duties with others; and
    • disclosing conflicting interests to the board for same to be listed in the interests register of the company;
  • Comply with all other applicable laws and policy guidelines issued by the Ministry for Lands and Natural Resources;
  • Monitor management and provide strategic guidance subject to any policy guidelines set by the company;
  • Establish relevant internal policies and ensure compliance with all relevant laws and regulations;
  • Set the company's long-term strategy and performance objectives, and monitor corporate performance;
  • Monitor and manage potential conflicts of interest;
  • Ensure the implementation of appropriate risk management/regulatory compliance policies;
  • Ensure the integrity of the company's accounting and financial systems (including independent audit) and the operation of control systems such as risk management, financial and operational controls;
  • Set:
    • the terms of the managing director's and senior executive compensation; and
    • the terms and conditions of employment of company employees;
  • Define compensation for board members and provide guidelines for other related expenses; and
  • Ensure that the company adheres to high standards of ethics and relevant industry behaviour.

5.2 How does the board exercise those roles and responsibilities?

  • By appointing a managing director from the board in accordance with Section 183 and 184 of the Companies Act 2019 and delegating authority to the managing director to act and report to the board periodically;
  • By setting up committees of the board:
    • to oversee relevant management projects and report to the board on same; and
    • to review relevant documents submitted by management for recommendation to the board for decision making; and
  • By setting targets for and reviewing the performance of management to make relevant recommendations to the board for decision making by the board.

5.3 What specific role does the board play in relation to: (a) Strategic planning? (b) Risk management? (c) Major and related-party transactions? and (d) Conflicts of interest?

(a) Strategic planning?

The board must:

  • ensure the development and implementation of strategic and other plans of the company on an annual, semi-annual or quarterly basis; and
  • monitor and evaluate the implementation of the plans to promote the success of the company.

(b) Risk management?

The board must ensure that the risks facing the company are identified, measured and managed. To this end, it should establish a risk management framework which outlines processes for:

  • identifying risks and/or determining the appropriate risk appetite;
  • assessing and evaluating the likelihood of recurrence, tolerance levels and potential impact; and
  • taking the necessary mitigation actions.

The board must also ensure that the right personnel have the capacity and commitment to implement the company's risk management strategies.

(c) Major and related-party transactions?

The board must ensure that major and related-party transactions (including internal group transactions):

  • are reviewed in order to assess risk;
  • are subject to appropriate restrictions (eg, by requiring that such transactions be conducted on non-preferential terms); and
  • comply with applicable legislation and other requirements, such as those prescribed under Sections 67 to 70 of the Banks and Specialised Deposit Taking Institution Act 2016 (Act 930) regarding exposure limits for loans to related parties and staff.

(d) Conflicts of interest?

The board must create and maintain a register of conflicts of interest in accordance with Sections 192 and 194-196 of the Companies Act 2019.

The board is encouraged to create an organisational culture that encourages employees to participate in the review of existing conflict of interest policies and practices, in order to improve their skills in identifying and resolving present and future conflicts of interest.

The board should ensure that:

  • a member of the governing body is recused from involvement in any affected decision-making process;
  • all members of the governing body, employees, service providers, clients and other stakeholders are duly trained in and reminded of:
    • the organisation's policy on gifts, conflict of interest, transparency and accountability mechanisms;
    • its application in the organisation; and
    • their personal responsibilities in the execution of the rules; and
  • an ethics committee is established or officers appointed, among other things, to:
    • promote observance and compliance with all organisation policies and guidelines; and
    • ensure that breaches are dealt with in accordance with the specified rules and regulations, to foster public confidence in the integrity of the governing body and its decision making.

5.4 Are the roles of individual board members restricted? Is this common in practice?

Individual non-executive board members provide their expertise solely in the boardroom and at committee meetings.

The role of individual executive board members is not restricted, because they represent the views of management in the boardroom and represent the board to management in dispensing their duty as executive management members of the company.

5.5 What are the legal duties of individual board members? To whom are these duties owed?

In Ghana, individual board members have the legal duties and responsibilities outlined in the Companies Act 2019. These duties are owed primarily to the company and its stakeholders, including:

  • shareholders;
  • employees;
  • customers;
  • suppliers; and
  • the wider community.

The key legal duties of individual board members in Ghana include the following:

  • Duty of care: Board members have a duty to act with reasonable care, skill and diligence in the performance of their roles. This includes making informed decisions and exercising due diligence in their responsibilities.
  • Duty of loyalty: Board members have a duty to act in good faith and in the best interests of the company. They must avoid conflicts of interest and disclose any potential conflicts that may arise between their personal interests and the interests of the company.
  • Duty of obedience: Board members have a duty to act in accordance with the company's constitution, applicable laws, regulations and other legal obligations. They must ensure that the company operates within the legal framework and complies with its statutory obligations.
  • Duty of confidentiality: Board members have a duty to maintain the confidentiality of sensitive information acquired in their capacity as board members. This duty ensures that sensitive company information is protected and not disclosed to unauthorised persons.
  • Duty to promote success: Board members have a duty to promote the success and long-term viability of the company. They should act in a manner that contributes to the company's sustainable growth, profitability and overall wellbeing.

5.6 To what civil and criminal liabilities are individual board members primarily potentially subject?

Individual board members in Ghana can potentially face civil and criminal liabilities for their actions or omissions in the performance of their duties. The specific liabilities vary depending on the nature of the violation and relevant laws. Potential liabilities that individual board members in Ghana may encounter include the following:

  • Civil liabilities:
    • Breach of fiduciary duty: Board members owe fiduciary duties to the company and stakeholders. Breach of these duties by acting against the company's best interests or engaging in self-dealing can result in liability for damages caused.
    • Negligence or mismanagement: If a board member's actions or omissions lead to losses or harm to the company or stakeholders due to negligence or mismanagement, they may be held liable.
    • Breach of confidentiality: The disclosure of sensitive or confidential information without authorisation or violation of the duty of confidentiality can result in liability for damages caused.
    • Breach of contract: Failure to fulfil contractual obligations, including duties outlined in appointment or employment agreements, can lead to liability for breach of contract.
  • Criminal liabilities:
    • Fraud: Engaging in fraudulent activities such as embezzlement, falsification of financial statements or deliberate misrepresentation can result in criminal charges relating to fraud, leading to fines and imprisonment.
    • Corruption and bribery: Participating in corrupt practices such as bribery or kickbacks is a criminal offence. Board members involved in corrupt activities may face criminal charges, including fines and imprisonment.

6 Shareholders

6.1 What rights do shareholders enjoy with regard to the company in which they have invested?

Pursuant to the Companies Act 2019, the rights of shareholders are as follows:

  • to appoint and remove auditors;
  • to appoint directors (other than in respect of a casual vacancy) and remove them;
  • to determine the remuneration of directors and auditors;
  • to adopt, alter or revoke the registered constitution of the company;
  • to declare dividends; and
  • to decide to wind up the company.

6.2 How do shareholders exercise these rights? Do they have a right to call shareholders' meetings and, if so, in what circumstances?

Shareholders have the right to call a general meeting to exercise these rights by passing a resolution on the matter. They can also exercise these rights by passing a written resolution. However, a written resolution does not apply in instances where a director or an auditor is being removed – they can only pass such resolutions at a general meeting.

6.3 What influence can shareholders exert on the appointment and operations of the board?

Shareholders can exert significant influence on the appointment and operations of the board through various means, as follows:

  • Voting rights: Shareholders often have the right to vote on the appointment or reappointment of directors during general meetings. Their votes can determine who gets to serve on the board. If shareholders cannot attend meetings in person, they can use proxy voting to appoint someone to vote on their behalf. This allows shareholders to collectively influence board decisions.
  • Nomination of directors: Some shareholders may have the right to nominate candidates for director positions. This can shape the composition of the board.
  • Annual general meetings (AGMs): AGMs provide a platform for shareholders to voice their opinions, ask questions and discuss board-related matters directly with the board and management.
  • Shareholder activism: Shareholders may engage in shareholder activism by advocating for changes in the board's composition, strategic direction or specific policies.
  • Approval of major transactions: Shareholders may need to approve certain major transactions – such as mergers, acquisitions and major capital expenditures – which can indirectly impact board operations.
  • Annual reports and disclosures: Shareholders can review annual reports and disclosures to assess board performance and operations. Their feedback may lead to improvements or changes.

6.4 What are the legal duties/responsibilities and potential liabilities, if any, of shareholders?

  • Fiduciary duty: Shareholders owe a fiduciary duty to the company and its other shareholders. This duty requires:
    • acting in good faith and in the best interests of the company; and
    • avoiding conflicts of interest.
  • Meetings: Shareholders have the right to attend general meetings and annual general meetings to discuss important matters related to the company's operations, financials and governance.
  • Voting rights: Shareholders often have the responsibility to vote on key matters, such as:
    • the appointment of directors;
    • the approval of major transactions; and
    • the amendment of the company's objects.
  • Compliance: Shareholders must ensure that their actions and decisions are in compliance with applicable laws, regulations and the company's articles of association.

Potential liabilities that shareholders may face include the following:

  • Piercing the corporate veil: Under specific conditions, shareholders may face personal liability for the company's debts and obligations if a court decides that the company's separate legal identity was exploited in order to:
    • engage in fraud;
    • evade legal responsibilities; or
    • perpetrate unfair actions.
  • Misrepresentation: If shareholders provide false or misleading information that leads to financial harm or misrepresentation, they could face legal liability.
  • Breach of fiduciary duty: Shareholders that misuse their position to gain personal benefits at the expense of the company or other shareholders could be held liable for breach of their fiduciary duty.
  • Conflicts of interest: Shareholders that engage in actions that conflict with the best interests of the company or other shareholders could face liability.
  • Environmental and regulatory violations: Shareholders may face liability if the company is found to be in violation of environmental regulations or other laws.

6.5 To what civil and criminal liabilities might individual shareholders be subject?

Individual shareholders can potentially face both civil and criminal liabilities based on their actions and responsibilities. Where a shareholder engages in fraudulent activities related to the purchase or sale of company securities, he or she may be subject to civil liability, including:

  • fines;
  • restitution; and
  • potential lawsuits from other shareholders.

Also, if a shareholder breaches his or her fiduciary duty to the company or other shareholders, he or she may be held liable for damages resulting from his or her actions.

Shareholders involved in fraudulent activities – such as providing false information to regulators, investors or the company – may face criminal charges. Additionally, if a shareholder is involved in money laundering activities related to the company or engages in bribery or corruption in relation to the company's operations, he or she could face criminal prosecution.

6.6 Are there rules governing the issuance of further securities in a company? Do rights of pre-emption exist and, if so, how do they operate? Can they be circumvented? If so, how and to what extent?

Yes, the Companies Act, 2019 provides guidelines on the issuance of securities, including shares, by companies.

Pre-emption rights exist in Ghana and are designed to protect existing shareholders when new securities are issued. They give existing shareholders the first opportunity to purchase newly issued securities (eg, shares) in proportion to their existing ownership. These rights ensure that existing shareholders are not diluted by new shareholders entering the company.

In Ghana, companies must offer new shares to existing shareholders before offering them to outsiders. Existing shareholders have the option to accept or decline the offer to purchase the new shares. If they decline, the company can then offer the new shares to other investors.

While the concept of pre-emption rights is designed to protect existing shareholders, there are situations in which these rights might be circumvented, such as the following:

  • Shareholder approval: In some cases, existing shareholders may vote to waive or modify pre-emption rights through a special resolution.
  • Convertible securities: If securities can be converted into shares, they might not always be subject to pre-emption rights when issued.

6.7 Are there any rules on the public disclosure of levels of shareholding and/or stake building?

The regulatory authority responsible for overseeing public disclosure in relation to levels of shareholding is the SEC . The SEC is tasked with:

  • ensuring transparency;
  • protecting investors; and
  • maintaining the integrity of the securities market.

Where an individual or entity acquires a certain percentage of shares in a public company which constitutes a substantial holding, the board must make a disclosure to:

  • the SEC;
  • the relevant stock exchange; and
  • the public.

The specific threshold triggering this disclosure can vary and is usually defined in the regulations or stock exchange rules. Failure to comply with these requirements can lead to penalties.

7 Shareholder activism

7.1 What role do institutional investors and other activist shareholders play in shaping corporate governance in your jurisdiction?

‘Shareholder activism' refers to actions taken by shareholders to influence the decision-making and governance practices of companies in which they hold shares. There are various ways in which shareholders can engage in activism to address various concerns.

Examples include the following:

  • Proxy voting and shareholder resolutions: Shareholders in Ghana exercise their influence by voting on important matters during annual general meetings or extraordinary general meetings. They can propose and vote on resolutions related to:
    • corporate governance;
    • executive compensation;
    • environmental sustainability; and
    • other relevant issues.
  • Shareholders can use these platforms to express their concerns and advocate for changes in company policies or practices.
  • Engagement with management and the board: Shareholders can engage in dialogues with management and the board in order to:
    • express their concerns;
    • seek clarification on issues; and
    • advocate for changes.
  • This engagement can take place through:
    • formal channels – for example, by appointing representatives to sit on the board of a company to advocate for their interest or attending shareholder meetings; or
    • informal communications with company representatives.
  • Institutional investors: Institutional investors – such as pension funds, insurance companies and asset management firms – play a significant role in shareholder activism. These entities may actively engage with companies in their investment portfolios, using their influence to promote good governance, sustainable practices and responsible behaviour. They can leverage their large ownership stakes to advocate for changes and push for improvements in corporate practices.

7.2 Is there any legislation or code of practice which applies to institutional shareholders? If so, what issues does it primarily address and how is it policed/enforced?

No, there is no legislation which applies to institutional shareholders. However, the Companies Act 2019 governs all shareholders, whether institutional or individuals.

7.3 How do activist shareholders typically seek to exert influence on corporations in your jurisdiction?

Activist shareholders in Ghana, as in other countries, seek to exert influence on corporations by using the following strategies to bring about changes in company policies, strategies, governance practices or management decisions:

  • Engagement with management and the board: Activist shareholders may engage in direct dialogue with management and the board of directors to express their concerns, propose changes and discuss their viewpoints on various matters, such as corporate strategy, governance and performance.
  • Shareholder resolutions: Activist shareholders can propose resolutions to be voted on during general meetings. These resolutions can address specific issues such as:
    • executive compensation;
    • environmental practices;
    • corporate governance reforms; or
    • strategic changes.
  • Engagement with other shareholders: Activist shareholders may engage with other shareholders to gain their support for specific proposals or changes, building a coalition that can have a stronger impact.
  • Litigation: In some cases, activist shareholders may resort to legal action if they believe that the company's actions or decisions violate corporate governance standards, shareholder rights or other legal requirements.

7.4 Which areas of governance are shareholders currently focused on?

  • Board composition and diversity: Shareholders often emphasise the importance of diverse and independent boards that represent a range of skills, backgrounds and perspectives. This includes advocating for:
    • gender diversity;
    • ethnic diversity; and
    • expertise relevant to the company's industry.
  • Executive compensation: Shareholders carefully examine how top executives are paid, making sure it matches company performance and the wishes of the shareholders. There is often a push for greater transparency and the elimination of excessive compensation that does not correlate with company results.
  • Shareholder rights: Shareholders often advocate for stronger shareholder rights, including the ability to:
    • propose resolutions;
    • nominate directors; and
    • have a say in major corporate transactions.
  • Environmental, social and governance (ESG) practices: Shareholders are paying more attention to how companies:
    • affect the environment;
    • handle social matters; and
    • manage their governance.
  • This includes issues such as:
    • climate change;
    • human rights;
    • how they treat their workers; and
    • how ethically they behave.
  • Stakeholder engagement: Shareholders promote engagement with regulators, customers, the community, employees and other stakeholders to help the company:
    • align with local values;
    • address specific community needs; and
    • contribute positively to the economy.
  • Related-party transactions: Shareholders are watchful of transactions involving insiders, executives or major shareholders that could potentially benefit one party at the expense of others.
  • Ethics and compliance: Shareholders aim to ensure that companies maintain strong ethical standards and adhere to well-structured compliance programmes. This is to prevent occurrences of fraud, corruption and other behaviours that deviate from ethical norms.

7.5 Have there been any high-profile instances of shareholder activism in recent years?

No, there are currently no high-profile instances of shareholder activism in Ghana.

7.6 Is shareholder activism increasing or decreasing in your jurisdiction? If so, how and why?

Shareholder activism is increasing as shareholders become more aware of their rights and responsibilities. Furthermore, growing concerns about ESG issues lead shareholders to advocate for responsible business practices.

The increased availability of information about companies' operations and practices also encourages shareholders to scrutinise and address perceived deficiencies.

8 Other stakeholders

8.1 What role do stakeholders such as employees, pensioners, creditors, customers, and suppliers play in shaping corporate governance in your jurisdiction? What influence can they exert on a company?

In Ghana, companies are increasingly recognising the significance of stakeholder engagement and integrating their perspectives into corporate governance frameworks, which contributes to:

  • enhanced decision-making;
  • improved corporate reputation; and
  • the long-term sustainability of the company.

For instance, employees may be represented on the company's board or committees, enabling them to contribute insights from an internal viewpoint. Also, employee concerns regarding workplace safety, equitable treatment and work-life balance can impact company policies and operations.

Pensioners may advocate for transparent financial reporting and judicious financial management to safeguard their retirement benefits; while creditors – including lenders and bondholders – closely monitor the company's financial wellbeing to protect their loans and investments.

Lastly, customers may opt to engage with companies that demonstrate ethical conduct and responsible practices; and close supplier relationships may lead to collaborative efforts on sustainability initiatives and ethical sourcing.

Each of these stakeholder groups can exert influence on a company through diverse avenues such as:

  • advocacy;
  • engagement;
  • investor pressure; and
  • media and public perceptions of stakeholder viewpoints.

9 Executive performance and compensation

9.1 How is executive compensation regulated in your jurisdiction?

In Ghana, executive compensation is typically assessed through a combination of:

  • labour law;
  • internal processes within organisations; and
  • regulatory guidelines established by government authorities.

Key factors and practices involved in assessing executive compensation in Ghana include the following:

  • Internal compensation committees: Many organisations in Ghana have internal compensation committees or boards responsible for evaluating and determining executive compensation. These committees are typically composed of independent directors or board members who review and make decisions regarding the compensation packages for executives.
  • Benchmarking: Organisations often use benchmarking as a practice to assess executive compensation. They compare the compensation levels of their executives with those of similar positions in comparable companies or industries. This helps to ensure that the compensation offered is competitive and aligns with industry standards.
  • Performance-based incentives: Executive compensation in Ghana often includes performance-based incentives. These incentives may be tied to:
    • specific financial targets;
    • key performance indicators ("KPIs" ; and/or
    • individual and organisational performance goals.
  • The structure of these incentives is typically designed to align executive compensation with the organisation's strategic objectives.
  • Regulatory guidelines: The SEC provides guidelines and regulations on executive compensation for publicly listed companies. These guidelines aim to ensure transparency, fairness and alignment with corporate governance principles. The SEC's Code of Corporate Governance provides recommendations on compensation practices, including disclosure requirements and the role of the board in setting executive compensation.

9.2 How is executive compensation determined? Do shareholders play a role in this regard?

Board engagement: The board of directors are responsible for approving an organisational chart, job description and compensation policy for all employees upon submission for review by the managing director.

Shareholder engagement: Shareholder engagement is an important aspect of assessing executive compensation in Ghana. Shareholders – especially institutional investors – are increasingly keen to ensure that executive compensation is reasonable and tied to performance. They may engage with the company's management and board during annual general meetings or through other channels to voice their concerns or provide input on executive compensation matters.

Where share options are adopted as part of executive remuneration or compensation, this must be:

  • tied to performance; and
  • subject to shareholders' approval at the annual general meeting.

9.3 Do any disclosure requirements apply in relation to executive compensation?

In preparing the financial statements, management must disclose executive compensation packages to the external auditors for their review. This is to ensure the judicious use of the budget allocated to the company for that purpose at the end of the financial year.

Regulatory authorities such as the SEC also require listed companies to disclose executive compensation details in their annual reports. These disclosures typically include information about the total compensation package, including:

  • salaries;
  • bonuses;
  • stock options;
  • retirement benefits; and
  • other forms of remuneration.

The level of transparency helps stakeholders to assess the reasonableness of executive compensation.

9.4 Have any measures to address the gender pay gap been introduced in your jurisdiction?

Gender pay gap measures typically aim to promote pay equity between male and female workers by addressing disparities in wages for equivalent work.

These measures can include the following:

  • Laws: The 1992 Constitution and the Labour Act 2003 mandate equal pay for equal work or work of equal value, regardless of gender. Such laws aim to eliminate wage discrimination based on gender.
  • Pay transparency: Requiring companies to disclose salary ranges for job positions can help to identify and address any gender-based disparities in wages.
  • Gender equality policies: Encouraging or requiring companies to implement gender equality policies, including pay equity assessments, can help to address unconscious biases and structural barriers.
  • Promoting women's leadership: Measures to increase the representation of women in leadership positions can contribute to reducing the gender pay gap.
  • Gender-neutral recruitment and promotion: Ensuring that hiring and promotion processes are unbiased and based on merit can help to reduce gender-based wage disparities.

9.5 How is executive performance monitored and managed?

As a crucial aspect of corporate governance and strategic management, executive performance is monitored and managed as follows:

  • Performance metrics and KPIs: Specific KPIs that measure executive performance against strategic goals should be defined. These metrics should be:
    • quantifiable;
    • measurable; and
    • directly linked to the company's success.
  • Performance appraisals: Regular performance appraisals for executives should be conducted. These assessments should enable a comprehensive evaluation of the employee's:
    • achievements;
    • strengths;
    • areas for improvement; and
    • alignment with the company's mission.
  • Ethical and legal compliance: Executive conduct should be monitored in order to:
    • ensure adherence to ethical standards and legal requirements; and
    • address any potential conflicts of interest or misconduct promptly.

9.6 What best practices should be considered with regard to executive performance and compensation?

  • A remuneration committee of the board should be established in order to:
    • oversee the design and operation of the compensation system; and
    • ensure that compensation is appropriate and consistent with the culture, long-term business interests and risk strategy of the company.
  • Shareholder approval should be sought for executive compensation plans, especially when there are significant changes to compensation structures.
  • Companies should actively engage the HR department to ensure that the organisation has appropriate HR policies for:
    • recruitment;
    • capacity development;
    • career and succession planning;
    • compensation; and
    • reward systems.
  • Executive compensation packages should tie a significant portion of compensation to the achievement of specific, measurable performance goals and KPIs.
  • Disclosure and transparency: There should be clear communication of executive compensation structures and policies in the company's annual reports and other public documents in order for shareholders to understand how compensation is determined.

10 Disclosure and transparency

10.1 What primary reporting obligations relating to corporate governance apply in your jurisdiction?

Companies Act 2019:

  • Annual financial statements: Companies must prepare and present annual financial statements, which include:
    • the balance sheet;
    • an income statement;
    • a cash-flow statement; and
    • notes on the financial statements.
  • These statements must be audited and presented at the annual general meeting.
  • Directors' report: Companies must prepare a directors' report as part of their annual financial statements. The report provides an overview of:
    • the company's operations;
    • its financial performance; and
    • other significant events during the financial year.
  • Annual returns: Companies must file annual returns with the ORC . These returns provide information about the company's directors, shareholders and other key details.

SEC regulations: The SEC Act and related regulations issued by the SEC establish reporting requirements for companies listed on the Ghana Stock Exchange or engaged in securities activities. Key obligations include the following:

  • Quarterly and annual financial reporting: Publicly listed companies must submit quarterly and annual financial reports to the SEC and the stock exchange.
  • Corporate governance guidelines: The SEC's Corporate Governance Guidelines for Publicly Listed Companies, 2020 outline best practices for:
    • board composition;
    • transparency;
    • accountability; and
    • reporting.

Bank of Ghana regulations: For banks and financial institutions in Ghana, the Bank of Ghana issues regulations that govern their operations and reporting obligations. These may include requirements relating to:

  • capital adequacy;
  • risk management; and
  • financial reporting.

Insurance regulations: The National Insurance Commission issues regulations for insurance companies operating in Ghana. These regulations cover areas such as:

  • financial reporting;
  • solvency requirements; and
  • risk management.

Anti-money Laundering Act 2020: This requires companies – especially financial institutions – to report suspicious transactions and comply with anti-money laundering and know-your-customer procedures to prevent money laundering and terrorist financing.

10.2 What role does the board play in this regard?

The board is responsible for:

  • overseeing the management of the company;
  • making strategic decisions; and
  • ensuring that the company operates in accordance with relevant laws, regulations and best practices.

Oversight and accountability: The board is responsible for:

  • overseeing the company's operations; and
  • ensuring that it complies with all applicable laws and regulations, including reporting obligations.

This includes reviewing and approving the company's financial statements, annual reports and other relevant disclosures.

Reporting review and approval: The board reviews and approves important reports such as:

  • annual financial statements;
  • quarterly reports;
  • directors' reports; and
  • other disclosures.

Risk management: The board ensures that appropriate internal controls are in place to mitigate risks related to financial reporting, legal compliance and other areas.

Corporate governance policies: The board establishes and enforces corporate governance policies and practices that guide the conduct of directors, officers and employees.

Auditor oversight: The board is typically responsible for selecting and appointing the company's external auditors, which:

  • review the company's financial statements; and
  • provide an independent assessment of their accuracy.

Stakeholder engagement: The board engages with shareholders, investors and other stakeholders to communicate the company's financial performance, governance practices and future plans.

10.3 What role do accountants and auditors play in this regard?


  • Financial reporting: Accountants are responsible for preparing accurate and complete financial statements in accordance with relevant accounting standards (International Financial Reporting Standards (IFRS), which Ghana has adopted).
  • Data accuracy: Accountants ensure that financial data is accurately recorded, classified and summarised in financial statements and other financial reports.
  • Internal controls: Accountants help to design and implement internal control systems that:
    • safeguard company assets;
    • prevent fraud; and
    • ensure the accuracy of financial records.
  • Disclosure: Accountants ensure that financial disclosures, notes to financial statements and other relevant information are provided in accordance with applicable reporting requirements.
  • Reporting compliance: Accountants ensure that the company's financial reporting practices adhere to relevant laws, regulations and reporting frameworks.
  • Advice to management: Accountants provide financial insights to management, helping them to make informed decisions based on financial data.


  • Independent examination: Auditors are external professionals who independently examine the company's financial statements and internal controls.
  • Audit opinion: Auditors issue an audit opinion that expresses their assessment of whether the financial statements present a true and fair view of the company's financial position and performance.
  • Audit procedures: Auditors conduct procedures in order to:
    • verify the accuracy and completeness of financial information;
    • assess internal controls; and
    • detect any material misstatements or irregularities.
  • Risk assessment: Auditors assess the company's risk profile, identifying areas where financial misstatements or non-compliance are more likely to occur.
  • Transparency: The audit process enhances transparency by identifying any discrepancies or weaknesses in the company's financial reporting and control systems.
  • Recommendations: Auditors may offer recommendations to improve internal controls, reporting processes, and overall governance.

10.4 What best practice should be considered in relation to reporting and disclosure?

  • Adhere to IFRS, which Ghana has adopted;
  • Ensure that financial reports are prepared and disclosed in a timely manner;
  • Maintain consistency in reporting methods and presentation over time,and provide clear and comprehensive information about the company's financial position, performance, risks and strategies;
  • Clearly communicate major risks that could impact the organisation's future performance; and
  • Consider including information on environmental, social and governance factors where relevant.

11 Audit and auditors

11.1 What rules relate to the appointment, tenure and removal of auditors?

In Ghana, the rules governing the appointment, tenure and removal of auditors are primarily outlined in the Companies Act 2019. An auditor is appointed by the shareholders. However, in certain instances – such as to fill a casual vacancy or for the first appointment of the auditor – the directors of the company may appoint the auditor. The Companies Act 2019 provides that:

  • the term of appointment of an auditor should not be more than six years; and
  • the auditor only becomes eligible for reappointment by the company after a cooling-off period of at least six years.

An auditor can also be appointed by the shareholders by passing a resolution at a general meeting.

11.2 Are there any rules or recommendations that limit the scope of services as regards the provision of non-audit services by an auditor?

In Ghana, auditors are subject to regulations set out:

  • by the Institute of Chartered Accountants, Ghana (ICAG); and
  • in the Companies Act 2019, which provides guidelines on the provision of non-audit services.

Auditors must:

  • maintain their independence and objectivity when providing non-audit services to their audit clients;
  • avoid conflicts of interest – for example:
    • providing services that involve making management decisions;
    • assuming managerial roles; or
    • providing financial services that could compromise the auditor's objectivity.

While auditors must maintain independence, there are certain non-audit services that can be provided as long as they do not impair independence. These services include:

  • advisory services;
  • tax consulting;
  • internal control reviews; and
  • other consulting services that do not involve the assumption of management responsibilities.

There may be requirements to disclose the nature and extent of non-audit services provided by the auditor in the audited financial statements.

Auditors must further:

  • maintain proper documentation of non-audit services provided, including the rationale for providing those services and how they relate to the audit engagement; and
  • adhere to the ethical standards and guidelines set by the ICAG. These standards emphasise the importance of integrity, objectivity and professional behaviour.

11.3 Are there any rules or recommendations which cap the remuneration of an auditor as regards payment for the provision of non-audit services?

While there are no explicit caps on auditors' remuneration for non-audit services, there are often guidelines and principles in place to address these issues:

  • Auditor independence: Regulatory bodies such as the SEC often emphasise the importance of auditor independence. Auditors are expected to be free of any financial or other relationships that could compromise their objectivity or create conflicts of interest.
  • SEC guidelines: The SEC has issued the Ghana Corporate Governance Code, which provides guidelines for corporate governance practices, including auditor independence and related-party transactions.
  • Disclosure and transparency: Companies are often required to disclose details about the fees paid to auditors for audit and non-audit services in their annual reports. This transparency helps stakeholders to assess potential conflicts of interest.
  • Audit committee oversight: Companies with audit committees may have these committees oversee auditor independence, including the provision of non-audit services. Audit committees ensure that the provision of non-audit services does not compromise the auditor's objectivity.

12 Trends and predictions

12.1 How would you describe the current corporate governance landscape and prevailing trends in your jurisdiction?

Ghana has been working to improve its corporate governance practices to enhance transparency, accountability and investor confidence. Institutions such as the ORC and the SEC have been actively involved in shaping the corporate governance landscape.

Prevailing trends include the following:

  • A focus on environmental, social, and governance (ESG) and sustainability: As in many parts of the world, there has been a growing focus on ESG issues in Ghana. Companies are increasingly recognising the importance of sustainability, social responsibility and ethical behaviour in their operations.
  • Digital transformation: The adoption of new technologies and the digital transformation have been on the rise in Ghana. Corporate governance practices are also evolving to address the challenges and opportunities presented by technology, data privacy and cybersecurity.
  • Shareholder activism: Shareholder activism has gained more attention globally and this trend may also have an impact in Ghana. As investors become more informed about their rights and corporate governance standards, they may engage more actively with companies to drive positive change.

12.2 Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

On 20 January 2022, the Institute of Directors-Ghana established a Technical/Drafting Committee – comprising important figures from both the public and private sectors, national and international academics and governance experts – to create a national code of corporate governance.

Known as the Ghana Code, this received approval for external circulation and national engagement on 31 August 2022. The Institute of Directors-Ghana has indicated that the final version will be published once additional stakeholder engagement has concluded.

13 Tips and traps

13.1 What are your top tips for effective corporate governance in your jurisdiction and what potential sticking points would you highlight?

In Ghana, as in any other country, organisations must have appropriate mechanisms in place to promote discipline, integrity, independence and transparency. These mechanisms help to minimise the risk of irresponsible behaviour and contribute to a culture of effective corporate governance. Key mechanisms that can be implemented include the following:

  • Codes of conduct: Organisations should develop and enforce codes of conduct that clearly define expected standards of behaviour for leaders, managers and employees. These codes should:
    • emphasise discipline, integrity and transparency; and
    • provide guidelines on ethical decision making.
  • Internal controls: Robust internal control systems should be established in order to:
    • safeguard organisational assets;
    • prevent fraud; and
    • ensure compliance with laws and regulations.
  • These controls should include:
    • checks and balances;
    • segregation of duties; and
    • regular audits to detect and prevent any misuse of power or resources.
  • Whistleblower protection: Organisations should establish mechanisms to encourage and protect whistleblowers who report unethical or illegal activities. These could include:
    • confidential reporting channels;
    • non-retaliation policies; and
    • independent oversight to ensure that concerns are properly investigated and addressed.
  • Independent oversight: Independent bodies, such as audit committees or external regulatory authorities, should be involved to provide oversight and ensure the independence of the organisation's internal control processes. These bodies can:
    • review financial statements;
    • monitor adherence to regulations; and
    • evaluate the effectiveness of accountability mechanisms.
  • Performance management systems: Organisations should enter into performance contracts with their employees which specify key performance indicators and subsequently appraise them on the basis of such contracts to ensure that they are motivated to produce the best results for the organisation. The results of these appraisals should inform performance-based bonuses paid at the end of the year. Furthermore, organisations should invest in training and development of employees, as this will sharpen their skills and help them give their best to the organisation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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