Building Strong Businesses: Corporate Governance Best Practices for Growth

Corporate governance is how businesses and organizations are managed and guided through rules and processes. In Ghana, it is important for business success, investor trust, and economic growth. The Companies Act, 2019 (Act 992) and other laws set the rules for good governance practices when running a business.

Here are some practices for ensuring compliance in Ghana’s corporate sector.

1. Strong Board Leadership and Independence

Companies should have a competent and independent board to oversee management decisions. The board should have independent non-executive directors who give fair and objective guidance. The chairperson and CEO should be different people to prevent too much power in one person’s hands.

2. Clearly Define Roles and Responsibilities

The board, management, and shareholders must have clearly defined roles to prevent conflicts. These roles may be defined in the company’s constitution which must be available to all persons.

3. Risk Management and Internal Controls

Companies should have strong risk management strategies to handle financial, operational, and reputational risks. Internal control systems should be in place to prevent fraud and inefficiencies.

4. Compliance with Laws and Regulations

Businesses must follow local laws like the Companies Act, 2019 (Act 992). They also need to follow tax laws, labour rules, and industry standards.

5. Transparency and Accountability

Companies should provide clear and accurate financial reports to shareholders and the public. Decision-making processes should be open and accountable to stakeholders. Regular audits should be conducted to ensure financial integrity.

6. Uphold Ethical Business Practices

Good governance depends on ethical behaviour. Organizations should set codes of ethics and conduct for employees, managers, and directors. They must also strictly enforce policies against sexual harassment,  bribery, corruption, and insider trading. A strong whistleblower policy should be in place to report unethical behavior.

7. Effective Communication, Stakeholder Engagement and Protection of Shareholders’ Rights

Companies should engage with employees, customers, investors, and regulators regularly. Open communication helps in building trust and maintaining positive relationships. Shareholders should have equal access to information and the ability to participate in key decisions. Annual general meetings (AGMs) should be held to update investors on company performance. Minority shareholders should be protected from unfair treatment.

8. Succession Planning

Companies should prepare for leadership transitions by developing future leaders within the organization. Clear succession plans ensure business continuity and stability.

9. Corporate Social Responsibility (CSR)

Companies should engage in community development initiatives and environmental sustainability. Ethical sourcing, fair wages, and social impact programs help build trust and brand reputation.

10. Adoption of Technology and Innovation

Businesses should embrace digital solutions for governance, financial reporting, and decision-making. Cybersecurity measures should be implemented to protect company and stakeholder data.

By following these best practices, companies in Ghana can improve efficiency, attract investment, and build a strong corporate reputation. Good corporate governance is not just a requirement, it’s a key to sustainable business success.

Last Updated on June 1, 2025 by samboad