The Deputy Governor of the Bank of Ghana, Elsie Addo Awadzi, has stated that the ability of businesses to recover from the adverse impact of the Covid-19 pandemic which broke out in 2020 largely depends on good corporate governance.

Speaking at the virtual media launch of the 4th edition of the Institute of Directors-Ghana (IoD-Gh) Excellence Awards held on July 8, 2021, she noted that the quality of leadership and governance is key to shape new visions and ways of doing business in the Covid era, which she described as "challenging and uncertain times."

Challenges arising from the impact of Covid-19

Mrs Awadzi disclosed that a business survey conducted in May and June 2020 by the Ghana Statistical Service in collaboration with UNDP and World Bank to assess the impact of the Covid-19 pandemic on Ghanaian businesses reported that businesses were significantly affected.

It reported that several businesses remain close and shedding jobs even after the three-week lockdown was lifted.

In addition, she said although "fiscal and monetary policy interventions have helped the private sector somewhat to weather the storm, the adverse effects of the pandemic continue to be felt.

"Economic activity has picked up significantly in the year to date; however, there is no gainsaying that the business environment remains challenging with significant uncertainty in the economic outlook gave the changing dynamics of the pandemic."

That notwithstanding, she believes good corporate governance will be a critical element of institutional survival, resilience, and sustainability.

Speaking on the theme "Good Corporate Governance and Ethical Leadership: An Essential Requirement for Organisational Turnaround,” Mrs Awadzi said, "good corporate governance will ensure that businesses are run and governed in a manner that harnesses the scarce resources available to create lasting value for all their stakeholders on a sustainable basis."

"The importance of good corporate governance in building strong institutions, communities, and economies, and helping to avoid the collapse of businesses cannot be overemphasized. From time immemorial, corporate failures have had at their roots poor corporate governance.

Bad poor corporate governance, on the other hand, she said, tends to be widespread, with several stakeholder groups feeling the brunt of the actions or inactions of a few.

"Examples abound, including the global financial crisis of 2007/08, mass corporate failures in Ghana’s banking and securities sectors in the last few years where we saw the demise of 420 institutions licensed by the Bank of Ghana, and several fund management companies licensed by the Securities and Exchange Commission, with colossal losses to depositors, other creditors, clients, employees, suppliers, shareholders, other stakeholders including the Ghanaian taxpayer.

The way forward

Rebuilding the economy post-pandemic, she said, will require a new emphasis on strengthening governance and sound management of corporate Ghana and public sector institutions to deliver the desired outcomes for all stakeholder groups.

"Good corporate governance is indeed the bedrock of any modern market economy," she said.

Other matters

Further, she commended the Institute of Directors-Ghana (IoD-Gh) for its efforts in ensuring the highest standards in good governance.

She said through the intervention of various initiatives such as the Corporate Governance Excellence Awards, IoD-Gh has left no one in doubt of its commitment to its mandate to promote the highest standards in good corporate governance.