Poor ethical culture and lack of effective leadership are the two key greatest challenges impeding the quest to deliver sustainable corporate governance practices in Africa, President of the Institute of Directors (IoD) Ghana, Rockson Dogbegah has said.

According to him, leadership seems to be a natural consequence of human interaction, stressing that “when we look at leaders who have changed the way we view the world, we are awestruck and amazed”.

He was speaking on the topic : “Building sustainable corporate governance system in Africa – the challenge facing Africa “ during the third Annual Corporate Governance Conference organized by the Institute of Directors, Kenya in Nairobi.

“Developed countries were once in the same poverty trap but what has happened since then? United Arab EmIrates only found oil in the early 70s and where are they now? What made things turn around in these scenarios? We need ethical culture and effective leadership to effect the necessary change we desire.

“Our societies are expecting ethical and effective leadership. A society and business landscape free from corruption. We need a critical mass to drive the anti corruption campaign to bring the expected change”, he stressed.

Importantly, corporate governance has become an increasing topical issue because of the far reaching consequences of the impact of corporate failures in the last few decades.

In effect, the recent financial sector crisis which led to the collapse of nine banks and many micro-finance companies has been largely been attributed to ineffective corporate governance practice. The country is yet to see the bottom of the rot as a projected GHS 7 billon is still needed to clean up the books of a number of savings and loans and micro-finance companies.

While what happens to the financial sector catches the eyes of the media because of the domino effect of the fall of financial institutions but a closer look at many state owned enterprises (SOEs) and institutions, small and medium scale enterprises and even larger family/owned and managed establishments in Africa reveals that the corporate governance climate in many countries is not the best.

“The importance of leadership for developing nations lies in the fact that both their economies and enterprises operate in a transformational environment in a global setting where things are changing very fast”, Mr. Dogbegah added.