Lack of a comprehensive national corporate governance code is affecting delivery in both the public and private sectors, Mrs Marian Barnor, the Managing Consultant of MRB Consult said on Wednesday.
Speaking at a validation workshop of the African Peer Review Mechanism (APRM) on corporate governance organised by the Private Enterprise Foundation, Mrs. Banor reiterated the need for the country to have a comprehensive code for corporate governance to guide both the private and public sectors.
Currently, there are voluntary codes being implemented by various institutions and organisations to enhance transparency and accountability in their operations.
The workshop is to validate or confirm the findings of the 2008 monitoring and evaluation exercise undertaken by the Private Enterprise Foundation.
Mrs. Barnor said the state of corporate governance in Ghana was not encouraging and needed to be addressed.
She cited inadequate awareness of corporate governance; lack of policy framework, enforcement and compliance governing businesses; and issues with Small and Medium Enterprises (SMEs) as some of the greatest challenges being faced in the area of corporate governance.
On SMEs, Mrs. Barnor said the problems are institutional, in terms of their governance framework.
She said, although most companies usually met the legal requirement of at least having two Directors, they did not have in place the appropriate legal structure.
“It may consist of a man and his wife heading a company but have no board of governors”, she said.
She said if SMEs pay appropriate attention to issues of corporate governance, it could help them to address the problem of lack access to credit and enable them get the necessary capital to expand their operations.
She said some companies put majority shareholders in charge as managers without examining whether they have the skills and know-how in governing a company.
Mrs Barnor suggested that SMEs needed to restructure their governance system, in that they must understand the role of shareholders, Board of Directors and Management to serve as checks among themselves.