[ 2016-11-08 ]

BoG,IFC to tighten banking regulations
The Bank of Ghana(BoG) has disclosed that it will
soon publish a reviewed draft document designed in
partnership with the International Finance
Corporation (IFC), aimed at enhancing good
corporate governance in the banking industry.

The draft document which was originally designed
in 2014 is also aimed at strengthening the
oversight responsibilities of the central bank to
protect depositors’ funds.

Speaking at the launch of  the BoG/IFC
partnership in Accra, the Second Deputy Governor
of the Bank of Ghana Dr. Johnson Asiama
highlighting some areas of the document maintained
that it will transform the banking industry.

He pointed out that , “the tenure of CEOs will
be capped at a maximum of three terms of five
years per term, secondly non-executive directors
shall have a tenure of three years for no more
than two terms and shall be in the majority of
every board”.

He added that “at the minimum, every bank shall
have at least two board sub-committee specifically
on audit and risk”.

“Fourthly the risk and audit committees shall be
chaired by non-executive director. Fifth the non
executive director’s independence has been
explicitly defined,” he said.

He disclosed that the managing director and board
chair positions of foreign banks cannot be
occupied concurrently by an individual.

Outlining some more provisions in the reviewed
document, Dr. Asiama stated that competencies for
board membership of banks shall be explicitly
defined in accordance with Basel requirements.

“The size of bank boards shall be limited as
well as the retiring age for directors prescribed.
Nine, disclosure of attendance at board meetings
by directors in annual accounts shall be
enforced,” he said adding that cross
directorship will be discouraged

He stated that another important area of the
document is that additional directorship
engagement will be limited to no more than five,
while evaluation of individual directors
performance and collective performance by external
agents shall be enforced.

Meanwhile, a Senior Country Officer of the IFC,
Joseph Akwasi Kuma told Citi Business News
Ghana’s banking sector needs Good Corporate
Governance to reassure international investors of
transparency.

According to him, it is important to have people
with integrity in the banking sector.

Source - citibsinessnews.com

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