As Ghana’s current government commits to resetting the country’s State-Owned Enterprises (SOEs) sector, an energy expert and corporate governance consultant, Dr. Kwabena Donkor, has identified that certain aspects of the country’s Presidential Transition Act is highly inconsistent with the tenets of good corporate governance of SOEs.
The former Minister for Power, who was speaking in an exclusive interview with The High Street Journal raised concerns about how Section 14 of Act 845, particularly its schedule, inadvertently undermines effective corporate stewardship in SOEs.
He cites the law provides that all presidential appointees, ministers, and members of statutory boards and corporations cease to hold office upon the assumption of a new administration.
Dr Donkor argues that the Presidential Transition Act, 2012 (Act 845) was enacted with the intent to ensure a smooth, orderly transfer of executive power between governments. However, these portions of the Act appear to be exacting unintended harm on another vital area of national development.
Dr. Donkor recognizes that while the provision of former appointees ceasing to hold office upon assumption of a new administration makes political and administrative sense, he argues that applying the same rule to SOE boards defies corporate governance principles, leaving many entities rudderless for months.
“The challenge this act creates is with corporate governance. I mean, the challenge impacts negatively on corporate governance,” he told The High Street Journal.
The Crisis of Months Without Governing Boards
The former MP for Pru East has observed that the vacuum created by the automatic dissolution of SOE boards has led to prolonged periods where critical state institutions operate without oversight, some for up to 10 months or more.
Citing instances within the current administration, Dr. Donkor noted that a number of SOEs still had no governing boards in place, despite being about 6 months into the administration of the current government.
The situation, he describes as not simply an administrative delay. He says it is a systemic dysfunction with serious implications. He emphasized that boards are responsible for strategic direction, financial oversight, policy formulation, and appointment of executives, including Chief Executive Officers (CEOs).
Without a properly constituted board, even the appointment of a substantive CEO becomes impossible, leaving institutions in the hands of acting officers with limited decision-making authority.
This governance vacuum cripples the ability of SOEs to function optimally, especially at a time when they are expected to drive key sectors such as energy, transport, and finance.
He observed that, “We’ve seen in the past, when there’s a change of government, some state entities are managed without a board for up to 10 months. As we speak, a number of entities still do not have a board, do not have their governing boards in place.”
Financial Accountability Under Threat
One of the gravest concerns he raised is the impact on financial transparency and accountability. According to Ghana’s Companies Act, 2019 (Act 992), SOEs, especially those registered as Limited Liability Companies, must publish audited financial statements by the end of March each year.
However, without a board to receive, review, and approve these statements, compliance becomes legally and practically impossible.
Dr. Donkor explained that audited reports must be signed off by the board, which also bears ownership and responsibility for their content. When there is no board in place, even well-prepared financial statements are rendered moot. This undermines transparency, weakens investor confidence, and creates loopholes for mismanagement and misreporting.
Structural Rigidity: A Policy Dilemma
Dr. Donkor described this legal structure as “butchering good corporate governance by such structural rigidity.” The rigidity of Act 845 means that, despite the best intentions, successive governments have left SOEs drifting without strategic leadership at a time when they are supposed to be implementing new national visions.
He therefore posed a critical policy question: Should outgoing boards be allowed to remain in office until successors are appointed? While this may seem like a practical fix, it directly conflicts with the existing provisions of Act 845, thus requiring either legislative amendment or constitutional review.
A Way Out: Rethinking the Appointing Authority
One suggestion from Dr. Donkor to help the country navigate this quagmire is the need to review the appointing process of SOE boards altogether. He argued that the State Interests and Governance Authority (SIGA), which is legally recognized as the “shareholder of record” for all commercial SOEs, should be empowered to appoint boards within a defined timeframe, ideally within the first one or two months of a new government taking office.
To him, the practice where political appointments to boards often bypass SIGA contradicts sound shareholder governance principles. Empowering SIGA to oversee these appointments could enhance consistency, professionalism, and depoliticization of SOE management.
“Should a shareholder of record, who is SIGA, be empowered to appoint these boards within the first 2 months of a change of government, or the first month?”, he quizzed.
The Need for Constitutional Review
Dr. Donkor believes that the Constitutional Review Commission is best placed to resolve this complex issue. He urged the Commission to consider reforms that would protect the institutional integrity of SOEs during transitions, while preserving the spirit of democratic accountability.
For him, President Mahama’s reset agenda to build strong, transparent, and efficient state enterprises cannot be realized if their governance is left vulnerable every four years. The Presidential Transition Act, while crafted in good faith, now demands a sober reassessment. A more nuanced approach, where democratic renewal does not disrupt institutional continuity, may well be the next frontier in Ghana’s governance reform.
