According to the Bank of Ghana, the directive is in fulfillment of Section 92(1) of the Banks & Specialised Deposit Taking Institutions Act , 2016 (Act 930).

Among others, the corporate governance directives seeks that the regulated financial institutions adopt sound corporate governance principles and best practices, promote and maintain public trust and confidence in regulated financial institution as well as minimize the possibility of regulated financial institution failures.

A major highlight of the corporate governance directive is the central bank’s stance on separation of powers.

Section 32 and 33 of the directives outlines the mode of selection and occupancy of the MD/CEO as well as Board Chairman as,

“There shall be a clear division of responsibilities at the top hierarchy of the regulated financial institution. The positions of the Board Chair and the Managing Director/Chief Executive Officer shall be separate. No one individual shall have unfettered powers of decision in any regulated financial institution and therefore no one person shall combine the two (2) top positions in any regulated financial institution at the same time.

The two (2) top positions of Board Chair and Managing Director (MD)/CEO in a regulated financial institution shall not simultaneously be occupied by foreigners. One of these positions shall be occupied by a Ghanaian national.”

No two (2) related persons shall occupy the positions of Chair and MD/CEO or Executive Director and Chairman in a regulated financial institution.
In addition, the tenure of the Managing Director/CEO of a regulated financial institution shall be a maximum of twelve years.

This could be split into three terms not exceeding four (4) years per term.

Directors on the other hand, shall have a maximum tenure of three (3) terms of three (3) years per term.

Meanwhile, a Board of any financial institution shall have two (2) board subcommittees, namely: an Audit Committee and a Risk Committee both of which shall be chaired by independent directors.

The Audit Committee shall have oversight of the regulated financial institution‘s internal and external audit functions.

On the other hand, the risk committee shall be responsible for advising the board on the financial institution‘s overall current and future risk tolerance/appetite and strategy of the regulated financial institution for various risks including Anti money laundering or CFT risk and for overseeing senior management‘s implementation of the risk strategy.