Clashes Between Board Member And Chief Executives Of Government Institutions Worrying
OccupyGhana® is increasingly concerned about the situation where persons appointed to chair the boards of Statutory Corporations, Commissions, Services and Authorities, and government-controlled companies, assume executive powers that they do not have under any law, holding themselves out as some sort of ‘Super Chief Executives’.
We are concerned that if this is not checked, it would create unnecessary clashes between board chairpersons and the Chief Executives or Managing Directors and sometimes even the staff of the organisations, which would be inimical to the relevant state entities and defeat all corporate governance principles.
No board chairperson of any of the entities mentioned above occupies an executive position as a matter of course. An executive position exists where a board member also holds an office for profit within the organisation or is specifically designated as such. That concept does not exist generally or by default under Ghana law, except, for instance, in the specific case of the State Enterprises Commission where the law makes specific reference to an “Executive Chairman” and “Executive Directors.” That Executive Chairman is specifically vested with responsibility for the day to day administration of the Commission, subject to general policy directives from the Board. He and the executive directors constitute the Executive Committee of the Commission.
The primary function of Board chairpersons is chair meetings of the Boards. They are not chairpersons over the entities. Thus no board chairperson is entitled to monthly remuneration, an office, official accommodation, official vehicle, etc., and to the extent that any such facilities have been, or are being, provided to board chairpersons, they are unlawful. Indeed, by law, all allowances paid to and benefits received by members of such boards have to be approved by the relevant Ministers, and we do not believe the Ministers would approve such allowances and benefits to non-executive board chairpersons.
Further, except where the laws or relevant company regulations expressly state otherwise, board chairperson have NO POWERS outside board meeting. By law, they only convene ordinary and special meetings of the boards and preside over those meetings. They are appointed by an appointing authority, by the board itself from among its number (e.g. Council for Indigenous Business Associations) or as the nominee of a specific entity (e.g. Auctioneers Registration Board).
In some instances, specific legal provision is made for the board chairpersons to:
(i). sign the minutes of board meetings (e.g. GNPC);
(ii). notify the appointing authority of vacancies on the board (e.g. Ghana Highway Authority);
(iii). authenticate the application of the seal of the corporation;
(iv). sign contracts on behalf of the corporation;
(v). have a casting vote in the event of a tie/equality of votes at a meeting (e.g. Atomic Energy Commission, CSIR, Forestry Commission) although this applies to anyone who presides over a meeting in the absence of the chair;
(vi). be present before a meeting is quorate (e.g. Council for Law Reporting), although sometimes it is the Chief Executive who has such quorate presence (e.g. Ghana Highway Authority);
(vii). have a specifically delegated power by the Board to appoint staff (e.g. Council for Law Reporting);
(viii). serve on the Executive Committee of the entity (e.g. CIBA);
(ix). sign certain payments (e.g. from the National Environment Fund set up under the Environmental Protection Act);
(x). sign specific transactions (e.g. a Free Zone development licence);
(xi). receive copies of internal audit reports (e.g. Ghana Education Trust Fund, the various Teaching Hospitals, GNPC); and/or
(xii). submit an annual report to parliament (e.g. PURC).
In one instance, specifically COCOBOD, the law expressly limits any role of the board chairperson during the intervals between board meetings to overseeing the implementation by the management of policy decisions taken by the board, only. Even then the law is careful to add that the board chairperson does not have any other functions except as conferred by law.
Particularly with respect to the boards of institutions whose heads are guaranteed independence under the Constitution, such as the Audit-Service and the Auditor-General, it is critical that the boards and board chairpersons are not allowed to assume unconstitutional powers of control and direction.
In respect of companies, the board chairperson presides over general meetings and board meetings, signs minutes of meetings over which (s)he presides, has a casting vote where there is an equality/tie of votes at directors’ meetings, and may permit persons other than members, directors, the secretary and auditors of the company to attend general meetings. The board chairperson has no executive or other powers, except where the board specifically authorises him to exercise some its powers, or the Regulations of the company provide for it.
We think that the appointing authority in these instances, the Government, should encourage its appointees to abide by the law and not assume powers that they do not have. Going forward, we recommend that persons appointed to such offices be required to undergo some short courses at GIMPA or some other institution to acquaint themselves, not only with the law governing the entities on whose boards they are to serve, but in corporate governance principles among others.
Yours, for God and Country,