The Dean of the University of Ghana Business School (UGBS), Professor Joshua Yindenaba Abor has cautioned organizations to be wary of appointing people who lack the requisite expertise onto their boards.
“Sometimes we appoint the wrong people on boards who lack the relevant expertise. This can be a problem to organizations,” he said.
According to Prof Abor, people appointed onto boards do not have to necessarily “have an experience in the industry within which the firm is operating but they need to have certain key skills that they bring to bear on the board.”
Prof. Abor said this at the re-launch of the University of Ghana Business School (UGBS) Executive Courses.
The program was on the theme: “Coverage Governance a Pillar to Sustainable Growth and Development”.
Prof. Abor added that conflict of interest was also a prominent issue on the board of some organizations. According to him, some board members, especially of financial institutions, use their position to take personal loans from the organization.
“This violates the principles of corporate governance. These are issues that we need to deal with in order to make our boards very effective,” he said.
The Dean of UGBS was alarmed at the size of some boards, lamenting that some boards were excessively large and members usually engaged in arguments and as such there was no consensus building to move the organization forward.
Prof. Abor called for the decoupling of the roles of the Chief Executive Officer and the board – responsible for the running of the organization; and for monitoring what management does, respectively.
He said the regulatory framework governing the way boards of listed companies are structured breach the dictates of good corporate governance and thus needs to be looked at critical.
“Securities and Exchange Commission (SEC) needs to come up with clear corporate governance rules, what we have currently are general guidelines which companies are not really obliged to follow. We have to migrate to having corporate governance laws that regulates how boards of companies are supposed to be structured.” Prof. Abor recommended.