a) Explain the term Corporate Governance from a banking industry perspective. b) Explain three determinants of weak
Question:
a) Explain the term ‘Corporate Governance’ from a banking industry perspective.
b) Explain three determinants of weak corporate governance that could lead to the insolvency of banks in Africa.
c) Discuss two implications of ensuring good governance by appointing non-executive directors with the requird qualification and experience.
The culture of poor corporate governance practice permeates indigenous business culture. In fact, since independence, Ghanaian industries have been grappling with sound corporate governance practices; largely because chunks of businesses are owned by family, friends or political cronies. The common refrain in Ghana is that “the business belongs to my uncle, my auntie, my father, mother etc., so I can do what I want with the money”. This cultural cancer has permeated in the governance of some indigenous banks. The issue of lack of capacity or ‘incompetence’ of boards to enforce good governance practice cuts across government owned banks and indigenous owned banks. According to Sanusi (2010), Nigeria boards and executive management in some major banks were not well equipped to run their institutions.
Perhaps the same can be said of the boards of the banks that have collapsed so far in Ghana. Required: Answer the following questions from the above preamble.
International Business
ISBN: 978-0470530658
8th edition
Authors: Michael Czinkota, Iikka A. Ronkainen, Michael H. Moffett