Corporate governance in Ghana. An analysis of board accountability in Ghanaian listed banks

Author:Larry Amartei Amartey, Mei Yu, Osita Chukwu-lobelu
Position:Birmingham City Business School, Birmingham City University, Birmingham, UK
Pages:126-140
SUMMARY

Purpose This study aims to examine the mechanisms that were being used to enhance board accountability of Ghanaian listed banks, and how board accountability can be improved. Design/methodology/approach The 2011 and 2016 annual reports of listed banks on the Ghana Stock Exchange were examined, and a survey questionnaire was sent to board members of nine banks. Findings Th... (see full summary)

 
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Corporate governance in Ghana
An analysis of board accountability
in Ghanaian listed banks
Larry Amartei Amartey
Birmingham City Business School, Birmingham City University, Birmingham, UK
Mei Yu
Centre for Financial and Corporate Integrity, Coventry University,
Coventry, West Midlands, UK, and
Osita Chukwu-lobelu
Birmingham City Business School, Birmingham City University, Birmingham, UK
Abstract
Purpose This study aims to examine the mechanisms that were being used to enhance board
accountabilityof Ghanaian listed banks, and how boardaccountability can be improved.
Design/methodology/approach The 2011 and2016 annual reports of listed banks on the GhanaStock
Exchangewere examined, and a survey questionnaire was sent to boardmembers of nine banks.
Findings The results show that the directors of Ghanaianlisted banks prioritise a shareholder approach
to accountability, with a shift towards stakeholders. Audit committees, external audits and internal audits
were the main mechanismsused by these banks to enhance board accountability. Some of these mechanisms
were not used effectivelyby a number of these banks.
Practical implications Board accountabilitycan be improved by appointing very competent people to
the board, the national adoption of a mandatory code of corporate governance,regular rotation of external
auditors andrequiring non-executive directors to stand for re-electionmore frequently. Our research identies
weaknesses of accountability mechanisms and offers timely recommendations for banks and regulators to
build strongercorporate governance systems.
Originality/value This study obtainedvaluable opinions of the boards of directors, providesinsights on
boards of Ghanaian listedbanks and contributes to the literature of corporate governanceand accountability
in Africa.
Keywords Corporate governance, Audit, Banking regulation, Bank
Paper type Research paper
1. Introduction
Corporate governance has gainedan enormous amount of attention over the past threeor so
decades. This has been due mainly to the large corporate collapses that have occurred
predominantly in the western world, which have been attributed to failures in corporate
governance. These companies include Barings Bank, Enron and Parmalat (Porter, 2009).
The downfall of Barings Bank in 1995 was attributed to weaknesses in internal controlsas
well as inadequate supervision. Enrons collapse was a result of the lack of directors with
integrity and honesty, as well as the inability of the companys external auditor to ask
searching questionsfor fear of losing non-audit-relatedfees (Mallin, 2010).
In 2008, Lehman Brothers, a big investment bank, led for bankruptcy. Its failure was
because of heavy involvement of sub-primemortgages, excessive leverage and risk-taking,
strategic mistakes and poor corporate governance. Lehmans board of directors was
JFRC
27,2
126
Received7 December 2017
Revised1 April 2018
Accepted31 May 2018
Journalof Financial Regulation
andCompliance
Vol.27 No. 2, 2019
pp. 126-140
© Emerald Publishing Limited
1358-1988
DOI 10.1108/JFRC-12-2017-0111
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1358-1988.htm

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