Board members and corporate executives of state owned enterprises and other state enterprises who flout corporate governance rules and regulations with impunity will no longer be left off the hook, President Nana Addo Dankwa Akufo-Addo has warned.
"The days where board members and corporate executives flout rules and regulations and are left off the hook are over," the President said and indicated that culprits could be made to face a term of imprisonment of not less than 5 years, and up to 10 years.
The President gave the warning yesterday when he launched the State Interest and Governance Authority (SIGA) to take up the mandate of the State Enterprises Commission and the Divestiture Implementation Committee.
According to the President, the law establishing SIGA had cloaked it with the responsibility to ensure the prosecution of board members and corporate executives who break or sidestep corporate governance regulations.
"This is a strong indication of the extent to which the barometer of corporate governance and executive decision making has been lifted," he said and urged SIGA to work in tandem with the various stakeholders and live up to its mandate.
President Akufo-Addo said SIGA had been established to, among other things, develop a code of corporate governance to guide and promote sound governance and institutional performance of state owned enterprises, joint venture companies, and other state enterprises.
Also, he said the authority would be responsible for assisting the Ministry of Finance to assess the borrowing levels of the state owned enterprises and other state enterprises in accordance with the relevant financial laws.
SIGA would also ensure that the various state owned enterprises, joint venture companies and other state enterprises paid the dividends due the state, he said and pointed out that the authority had been established due to the negative returns on state owned companies and corporate governance challenges.
President Akufo-Addo noted that state owned companies were established in the past to produce goods and services to citizens, in addition to creating employment opportunities with the aim to improve the standard of living of people.
He said there had been enactment of statutes and establishment of bodies to deal with the coordination with the companies but most of the statutes had become outdated, while the bodies responsible for dealing with their coordination had suffered systematic internal failures.
"Most of state owned enterprises and joint venture companies have sustained losses and become highly indebted and near collapse, he observed and added that majority of the companies had been unable to pay dividends to the state, while others were relying on government bailouts.
While many had closed down over the years, he said the government was currently holding equity interest in 103 enterprises, including joint venture companies in key sectors of the economy.
President Akufo-Addo acknowledged the efforts of past governments to regulate the enterprises to make them efficient but noted however that the systematic failures still persisted while the bodies established to regulate them had been saddled with institutional and operational bottlenecks and setbacks.
The President said SIGA had been given the mandate to monitor and streamline ownership issues and aspects of operations to ensure good corporate governance practices at the various state owned enterprises.
With the establishment of SIGA, the laws establishing the State Enterprises Commission and the Divestiture Implementation Committee had been repealed, with all assets and liabilities transferred to the authority, he said.
President Akufo-Addo inaugurated the board of SIGA, chaired by Mr Terry Darko, former President of the Ghana Employers' Association and announced Mr Stephen Asamoah Boateng as the Director General.
Minister of State at the Office of the President, Dr Kwaku Afriyie has also been appointed and given oversight responsibility of SIGA.