Conflict of interest goes against the principle of integrity, especially in public companies. In Ghana, the duties directors perform are provided for with transparency and accountability in mind. This article discusses conflict of interest in public companies in Ghana and the laws guiding them.
Generally, conflict of interest arises when a director or officer in the company considers their personal gains over the benefit of the company or its shareholders. Considering the important role public companies play in the Ghanaian economy, it is important for conflict of interest to be prevented.
Ghana’s Companies Act orders directors to reveal any personal interest they have in contracts or proposed contracts with the company. This must be made to the board of directors.
Also, a director is not allowed to vote on any matter in which they have a material interest. For example, if a Director of Ghana Grid Company (Gridco), Mr Aso owns Trinity Bank and Gridco is considering getting a loan from there, Mr Aso must inform the directors that he owns Trinity Bank.
In addition, during the meeting where the directors decide whether or not to borrow from Trinity Bank, Mr Aso is not allowed to vote. This is because he would directly benefit from any agreement entered into with Trinity Bank.
Laws on conflict of interest are very necessary for the well-being of a company. This is because directors are the ones who control the business. They have a duty to act in ways that benefit the company. If there is a transaction between companies they have an interest in (Trinity Bank) and the company they act as directors (Gridco), it is very likely that their focus will be on the benefits Trinity Bank will get, rather than the benefits of Gridco and Ghanaians at large.
Where Directors do not disclose conflicts of interest, they face criminal charges or may even be sued by the company.
Conflict of interest is a continuous risk in public companies in Ghana. While there are general laws against it, public companies must create policies that promote transparency and integrity for the interest of the company and the Ghanaian society.
