The Brong Ahafo chapter President of the Association of Rural Banks (ARB) Ghana, Isaac Owusu Gyamfi, has attributed the collapse of many financial institutions in the country to the absence of good cooperate governance practices.
Speaking with the Ghanaian Times in an exclusive interview at Kukuom on Monday on the performance of financial institutions in the Ahafo region, Mr Gyamfi noted that good governance practices protected the interest of depositors and shareholders, builds and maintains public confidence, and contributed to the integrity of the financial institution.
The Chapter President added that financial institutions were charged with upholding the public’s trust saying that sound cooperate practices requires boards and executive members to assume their responsibilities.
Mr Owusu stressed that six Rural/Community Banks (RCBs) were currently not in operation due to related party transactions that were not approved by board, poor cooperate practices and risk management systems.
“Ineffective boards, non – regulatory compliance, poor credit management and internal audit failures are key issues identified as contributing reasons to the failures of most banks,” he stated.
The Chapter President said every board member must have knowledge in any of these key areas namely banking, finance, audit, law, economics, risk management, strategic planning, cooperate governance among others.
Mr Owusu was very optimistic that Board of Directors (BoDs) who possessed appropriate experiences, competencies and personal qualities including professionalism and credibility, would strengthen the performance of their respective banks.
He cautioned that no person must assume the office of Director of an RCB without obtaining the prior written approval from the Bank of Ghana (BoG) adding that this is for the welfare of the institutions.
The Chapter President reiterated the call on the RCBs to be in constant touch with the ARB – Ghana, to form a formidable force with others to make their voices heard.
Mr Owusu expressed appreciation to the various RCBs in the Bono and Ahafo enclave, management and staff of ARB, traditional authorities and other key stakeholders, for supporting the activities of the Association.
FROM EMMANUEL ADU GYAMFI, KUKUOM