Former Power Minister and governance consultant, Dr. Kwabena Donkor, is raising a red flag over what he describes as a deep-rooted culture of poor corporate governance crippling indigenous Ghanaians’ businesses.
He says the issues of poor corporate governance are not limited to state-owned enterprises, but extend to indigenous private companies.
To him, the indigenous Ghanaian banks, both state and privately owned, are the worst culprits.
Dr. Kwabena Donkor, in an interview with The High Street Journal, championed the need for a paradigm shift and further insisted that Ghana’s Institute of Directors has a critical role to play.
A Culture of Weak Governance at the Core of Business Failure
The former minister observes that Ghana’s repeated business failures, whether state-owned or privately run, all trace back to one issue, which is terrible corporate governance.
It is a major reason why Ghanaians are unable to nurture generational and multinational businesses. According to him, many Ghanaian businesses are built on personal loyalty rather than competence.
He explains that business owners often appoint family and friends as directors even when they lack the basic capacity to steer a company. This, he reveals, is a direct contravention under Ghana’s Companies Act (Act 992). The act stipulates that directors must have clear responsibilities; unfortunately, many appointees do not understand or fulfill.
“At the heart of our business failures, whether state or private, is poor corporate governance. Absolutely poor corporate governance. And I don’t mince words. Whether in the indigenous private sector or in the state sector, poor corporate governance has been the bane of our underdevelopment,” he lamented.
He added, “Even private companies, Ghanaian business people, when they set up their companies, who are their directors, they tend to appoint their children, their family members as directors without any knowledge. Meanwhile, there is an expectation of directors under Ghana’s Cooperatives Act, Act 992.”
Fear of Knowledge Is Sinking Local Companies
Dr. Donkor, in his submissions, further points to what he believes to be national discomfort with expertise. In his estimation, a section of Ghanaians treats knowledge like a threat rather than a tool.
Instead of appointing skilled people who can challenge decisions constructively, many business owners pick directors who simply agree with them. The result is what he calls “appointments that border on mediocrity.”
This circle of underqualified leadership, he says, creates a boomerang effect. He recounts that it results in situations such as corporate boards that cannot read financial statements and end up making poor decisions that weaken institutions, especially banks.
“We seem to be a people afraid of knowledge, a people uncomfortable with knowledge, especially when it comes to appointments. We are uncomfortable with knowledge. And so we make appointments. Appointments that border on the mediocre. Either because we want to exercise unnecessary personal control,” he noted.
Institute of Directors Must Step Out of the Shadows
Dr. Donkor, who admits to being a fellow of the Institute of Directors, says the institution cannot be absolved from the poor situation of corporate governance in the country.
He believes the Institute has been “too quiet” and must lead a national push for stronger governance standards.
According to him, the Institute should champion reforms, educate the public, and force a national conversation on how directors are appointed and trained.
“Unfortunately, the Institute of Directors, of which I’m a fellow, has been too quiet in terms of public advocacy. they will have to enhance their public advocacy by bringing the mainstream issues of corporate governance to the fore,” he charged.
A Call for Objective and Competence-Based Appointments
To fix the problem, Dr. Donkor says Ghana must learn from the systems used in places like Namibia. He revealed that there, director appointments are regulated, and individuals must pass corporate governance exams before being considered for state board positions.
Ghana, he argues, needs a model that ensures directors understand their roles, prioritizes competence over personal loyalty, links remuneration to performance, and builds a pool of qualified leaders for both state and private institutions
Without this, he warns, the cycle of collapse and stagnation will continue. The former minister insists that fixing governance failures requires stronger regulatory oversight. Regulators must enforce rules, demand competence, and hold boards accountable.
