Strengthen governance or risk another financial crisis – BoG to Banks

Bank boards have been cautioned to rethink their role in safeguarding Ghana’s financial system or risk triggering economy-wide consequences.

According to Special Advisor on Corporate Governance at the Bank of Ghana, Sandra Thompson, strengthening board oversight is critical if the financial sector is to avoid revisiting the failures that led to the country’s sweeping clean-up exercise in 2017.

Speaking at the Corporate Governance Series organized by Corporate Secretariat and Training Services Limited, she argued that the responsibility of boards now extends beyond internal performance metrics.

The clean-up, which began in August 2017, resulted in the revocation of licenses of 9 universal banks, 347 microfinance companies, 39 microcredit companies, 15 savings and loans firms, 8 finance houses, and 2 non-bank institutions, costing taxpayers over GH¢20 billion.

Sandra Thompson, who also serves as an Adjunct Lecturer at the GIMPA Law School, argued that boards’ responsibilities now extend beyond internal performance metrics. “Their decisions shape not only institutional performance, ladies and gentlemen, and resilience, but public confidence and market trust,” she stated.

According to her, the governance landscape has fundamentally shifted. “Bank boards are no longer seen as stewards of individual banks, but guardians of financial stability… the board’s decisions or failures to act can have economy-wide consequences.”

She maintained that the modern board “operates at the intersection of strategy, risk, governance, and accountability,” stressing that “the board’s role is not to manage the bank… but to exercise informed judgement under uncertainty.”

With financial innovation and cross-border banking activity accelerating across West Africa, she noted that effective board oversight has become a stabilising mechanism for sustaining public trust.

“The question before us… is not whether boards matter for financial stability… but how must boards evolve in composition, in capability, in mindset, and in practise to meet today’s realities?”

The series featured regulators, governance experts and industry leaders including Ismail Adam – Head of Banking Supervision at the Bank of Ghana , CEO, Ghana Association of Bank,John Awuah and Executive Head of Retail Banking at GCB Bank Sina Kamagate who shared insights on strengthening board effectiveness in Ghana’s evolving financial ecosystem.