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General News of Saturday, 26 February 2022

Source: GNA

Good Corporate Governance can lead to poverty reduction – IoD-Ghana

Rockson Kwesi Dogbegah Rockson Kwesi Dogbegah

Mr Rockson Kwesi Dogbegah, President, Institute of Directors Ghana (IoD-GH) says with the right implementation of effective regulatory policies, good corporate governance can help reduce poverty and promote transformation.

He said good corporate governance with the right regulatory framework would improve incomes and decrease poverty.

 Mr Dogbegah, speaking at a meeting of the Project Management Institute, said the importance of Corporate Governance was made apparent by the positive impacts that occurred when risks were controlled, and company procedures were streamlined and made consistent.

He said the four guiding principles of poverty reduction - “four Ps – People, Purpose, Process, Performance,” were at the heart of good corporate governance.

Mr Dogbegah, also the Chairman of the African Corporate Governance Network (ACGN), noted that bad corporate governance could cast doubt on a company's reliability, integrity, or obligation to stakeholders all, which could have implications on the firm's financial health.

He said poor corporate governance had been cited as one of the major causes of the collapse of the seven banks by Bank of Ghana, adding that the boards and senior management were either inactive or engaged in activities that served their personal interests rather than to the growth of the banks.

 “For instance, there was the observation that most of the non-performing loans were advanced to people who were related to senior board managers,” he said.

 Furthermore, he said the Board of Directors of the banks failed to oversee bank accounting and corporate reporting systems as well as the external auditing system due to lack of “experience or greed.”

 He averred that the general non-adherence to policies of corporate governance had greatly contributed to the collapse of those banks.

Mr Dogbegah said adherence to good corporate governance, including ethical culture and effective leadership, effective controls, good performance would lead to the achievement of organisational objectives, ensuring inclusive growth, and ultimately, reduce poverty.