Corporate Governance Directives for Rural and Community Banks, 2021
The Bank of Ghana (BoG) recently issued new corporate governance and risk management guidelines for Rural and Community Banks (RCBs) under the powers conferred on BoG by sections 56 and 92 of the Banks and Specialised Deposit-taking Institutions Act, 2016 (Act 930). These guidelines will compel RCBs to adopt sound corporate governance principles and ensure that RCBs have a structured approach to risk management systems in their respective institutions.
The guidelines fall into two categories: corporate governance guidelines and risk management guidelines. Regarding the former, RCBs must obtain prior written approval by the BoG for the appointment of directors and notify BoG of the changes in directorship and key management personnel. Further, shareholding in RCBs is restricted to Ghanaians and shareholding by any natural person and shall not exceed 30% of total shares.
Regarding risk management, the guidelines set out the minimum standard provisions on policies and procedures that must be included in the various manuals used by the RCBs. The guidelines also provide RCBs with the needed guidance to protect their institutions from losses, protect and attract capital, instill confidence in the regulator and other stakeholders through the adoption of measures that promote stability in rural banks and the wider financial sector.