The Institute of Directors (IoD) Ghana has asked Government to stop appointing Chief Executive Officers (CEOs) of State -Owned Enterprises (SOEs) before the constitution of Boards of Directors for the Enterprises.
A released signed by President of the Institute and copied to the Ghana News Agency (GNA) said the practice was not in line with “decent” corporate governance practices and negatively affecting the management and operations of such enterprises.
“The Institute wishes to state strongly and categorically in no uncertain terms that the practice frowns on good corporate governance practices… The Institute equally condemns as inappropriate, the subtle, but cunning attempts to correct the wrong by appointing the CEOs in acting capacities before appointing Boards to confirm their appointments”, the release stated.
According to the Institute, such practices made CEOs answerable to the President and not the Boards, “tactically endorsing the CEOs as more powerful than the Boards”, and could be blamed for the “many instances of collision” between the two.
The Institute further alleged that such appointments resulted in the dissolving of the Boards whenever “conflicts, real or imagined” arose between them and the CEOs.
The IoD therefore advised Government to among others, first constitute the Boards of SOEs, and grant them the freedom to recruit CEOs through an open and competitive process.
The release also called for distinct terms of reference and measurable targets for both Boards and CEOs and asked that Boards only be dissolved in accordance with corporate governance practices and laid down procedures.
It also recommended that CEOs have their appointments terminated based on poor performance and misconduct as laid out in contract terms and conditions.
The release said Government’s strict adherence to the above best corporate governance would promote transparency, accountability and meritocracy and also help to turn the fortunes of SOEs into sustainably profitable entities.