Dissolved state boards: Corporate governance at risk

 

By DIVINE AKOTIA, CGA

On 2 September 2026, President John Dramani Mahama directed the immediate dissolution of the governing boards of nine state-owned enterprises and public institutions: the Ghana National Petroleum Corporation (GNPC), BOST Energies, Consolidated Bank Ghana Limited (CBG), Volta Aluminium Company Limited (VALCO), Prestea Sankofa Gold Limited, Ghana Post Company Limited, TDC Ghana Limited, the Road Maintenance Trust Fund and the National Sports Authority.

The official announcement directed the relevant sector ministers to take the necessary steps, in accordance with applicable laws and governing instruments, to give effect to the dissolution.

It further stated that the affected boards would be reconstituted “in due course.”

More than a month later, the episode raises questions that go beyond politics.

They concern corporate governance, institutional continuity, accountability, directors’ reputations and ultimately the management of public assets belonging to the people of Ghana.

The initial announcement did not state the specific reasons for dissolving the nine boards.

Subsequently, however, Government Communications Minister Felix Kwakye Ofosu was reported as explaining that the decision related to “conduct deemed inappropriate.”

Even that subsequent explanation raises further governance questions. Was the concern common to all nine boards?

Was it collective conduct or the conduct of particular directors? Were there different governance concerns at different institutions?

Were individual directors investigated or found culpable?

These questions matter because dissolution of a board and a finding of misconduct against an individual director are not the same thing.

A board is not ceremonial

In corporate governance, a board is not simply a collection of prominent individuals assembled periodically to approve management proposals.

The board represents a critical layer between ownership and management.

It provides strategic direction, supervises management, oversees risk, protects assets, monitors financial performance, considers major investments and transactions, ensures compliance and holds executives accountable.

The OECD Guidelines on Corporate Governance of State-Owned Enterprises emphasise that SOE boards should possess the authority, competencies and objectivity necessary to provide strategic guidance, oversee risk and monitor management.

Ghana’s own Code of Corporate Governance for Specified Entities and Public Service Organisations similarly recognises the importance of governance structures in ensuring that public institutions are efficiently and effectively managed for the benefit of citizens.

This distinction becomes especially important when the shareholder is the State.

In a private company, shareholders ultimately bear the economic consequences of poor governance.

In a state-owned enterprise, citizens are the ultimate beneficial owners.

Losses, inefficiencies, failed investments and excessive liabilities may eventually become fiscal burdens borne by taxpayers.

Consequently, the prolonged absence of a functioning board in a strategically important public institution should never be regarded merely as an administrative inconvenience.

Management cannot permanently substitute for a board

Management and boards perform fundamentally different functions.

Management runs the enterprise. The board governs the enterprise and oversees management.

This separation is one of the foundations of modern corporate governance.

When the board disappears, the institution responsible for independently questioning management also disappears.

Board committees dealing with audit, risk, finance, procurement, remuneration, strategy and other specialised responsibilities may cease functioning or become incapable of exercising their normal mandates.

Management may competently maintain day-to-day operations during a transition.

But it cannot permanently become both the entity being supervised and the substitute for the body expected to supervise it.

The longer such an arrangement continues, the greater the possibility of what may appropriately be described as a governance vacuum.

Strategic decisions may be delayed

The affected institutions are not peripheral organisations.

BOST operates within Ghana’s strategic petroleum infrastructure. GNPC occupies a central position in the country’s petroleum interests.

CBG operates within the regulated banking sector. VALCO is connected to Ghana’s industrialisation ambitions.

The Road Maintenance Trust Fund is associated with financing critical road-maintenance activities.

The remaining affected institutions operate in mining, housing and real estate, postal services and sports administration.

These institutions may at various times have investment decisions, procurement programmes, financing arrangements, budgets, contracts, risk matters and strategic partnerships requiring board consideration.

The absence of boards can therefore produce two undesirable possibilities.

The first is decision paralysis, where important decisions are postponed because the required approving authority is unavailable.

The second is decision migration, where matters ordinarily reserved for an independent governing board gradually migrate towards management, sector ministries or other temporary approving authorities.

Either outcome deserves attention.

A temporary arrangement may keep an institution operational, but operational continuity is not necessarily the same as governance continuity.

The particular case of CBG

Consolidated Bank Ghana presents an additional governance dimension because banking institutions operate within a particularly demanding regulatory environment.

The Bank of Ghana’s Corporate Governance Directive 2018 establishes extensive requirements relating to board responsibility, board composition, management oversight, risk management, succession planning, committees, meetings, conflicts of interest and board evaluation.

The reason is straightforward. A bank’s board is part of its prudential architecture.

Banking institutions take deposits, allocate credit, manage financial risks and operate within a sector in which governance failures can have consequences extending far beyond a single company.

A prolonged governance vacuum in a regulated financial institution must therefore be examined not simply from the perspective of public administration but also from the perspective of prudential corporate governance.

What happens to accountability during the vacuum?

There is another important question.

If something goes seriously wrong during the period between the dissolution of the old board and the constitution of the new one, where does ultimate governance responsibility lie?

This is not merely theoretical.

Suppose a major contractual exposure emerges. Suppose an important investment decision must be taken. Suppose management identifies a material risk requiring board intervention.

Suppose an audit matter ordinarily requiring consideration by an Audit or Risk Committee arises.

Who provides the independent challenge? Who exercises the reserved powers of the board? Who carries responsibility for strategic oversight?

Clear interim governance arrangements are therefore essential whenever an entire board is removed.

Good corporate governance is concerned not only with who has power, but also with ensuring that there is never uncertainty about who carries responsibility.

The reputation of the individual director

Perhaps the least discussed aspect of the September decision concerns the individual directors themselves.

Public announcement of the dissolution of an entire board can easily create a perception that every director has failed or committed wrongdoing. That conclusion would be unfair unless supported by evidence.

Collective termination of board appointments does not automatically establish individual misconduct, negligence, incompetence or breach of fiduciary duty.

This distinction becomes particularly important following the subsequent reference to “conduct deemed inappropriate.”

If inappropriate conduct involved particular individuals or particular decisions, good governance requires sufficient differentiation between institutional action and individual responsibility.

Otherwise, directors against whom no adverse finding has been made may suffer reputational damage merely through association.

Corporate governance rests heavily upon accountability. But meaningful accountability should be capable of answering a simple question:

Who was responsible for what? Collective accountability should not automatically become collective guilt.

Can the dissolved directors serve on other boards?

This brings us to an important question for the affected individuals.

Can members of the dissolved boards subsequently be appointed to other public or private boards?

As a general governance proposition, YES, provided the person satisfies the applicable law, governing instrument, regulatory requirements, fit-and-proper standards and conflict-of-interest requirements for the new position, and provided there has been no individual finding or legal disqualification that makes the person ineligible.

The mere dissolution of a board does not, by itself, establish that every member is professionally unfit to serve elsewhere.

The Companies Act, 2019 (Act 992) contains provisions governing directors, including circumstances in which persons may be disqualified from acting as directors.

Sector-specific laws and regulators may impose additional requirements.

It is therefore important to distinguish between three things: (1) removal from a particular board; (2) adverse findings against an individual director; (3) legal or regulatory disqualification from serving as a director. They are not synonymous.

Indeed, Sports and Recreation Minister Kofi Adams has publicly indicated that some members of the dissolved National Sports Authority Board could find themselves reappointed either to that board or other boards because of their expertise, while institutional representatives could also be renominated. That reinforces an important governance principle:

Termination of an appointment is not necessarily disqualification from future service.

Transparency protects government too

There is sometimes a tendency to regard demands for explanations as criticism of government.

It need not be so.

Transparency actually protects the appointing authority.

Where government believes that a board has underperformed, breached policy, exceeded its authority, suffered serious governance failures or engaged in inappropriate conduct, communicating an appropriate level of explanation strengthens the credibility of the intervention.

It also protects competent directors who may have been caught in a collective restructuring exercise.

Conversely, where boards are dissolved without sufficient differentiation between institutional concerns and individual culpability, an information vacuum develops.

And information vacuums are quickly filled by speculation. Good governance seeks to reduce such uncertainty.

International good practice is instructive. The OECD recommends well-structured, merit-based and transparent nomination processes for SOE boards and states that board members should be selected according to relevant qualifications and competencies.

The OECD’s guidance goes further: board members should only be removed for good cause, and appointment and removal arrangements should be insulated, as far as possible, from electoral or political cycles.

This does not remove the legitimate authority of the State as owner. Rather, it seeks to ensure that the State exercises ownership professionally.

Ghana already has a governance architecture

Ghana does not lack a framework for improving governance of state-owned enterprises.

The State Interests and Governance Authority Act, 2019 (Act 990) established SIGA as the central institution responsible for oversight of specified entities.

Ghana also has a State Ownership Policy and a Code of Corporate Governance for Specified Entities and Public Service Organisations.

The State Ownership Policy recognises, among other things, the importance of competent and diverse boards, board autonomy, transparency, annual board evaluation and effective risk-management systems.

The architecture therefore exists. The more important challenge is implementation.

The IMF warning Ghana should not ignore

Perhaps the most striking context surrounding the September dissolution comes from an International Monetary Fund Technical Assistance Report on Ghana’s state-owned enterprises published on 9 September 2026, only seven days after the nine boards were dissolved.

The report acknowledges progress Ghana has made through the establishment of SIGA, adoption of the State Ownership Policy and improvements in fiscal-risk monitoring.

But it also identifies significant remaining governance challenges.

Among its recommendations is the need for Ghana to design and introduce a merit-based selection process for SOE boards and executive management, beginning with macro-critical SOEs.

The report further observes that formal and transparent procedures for selecting and appointing SOE board members and chief executives remain insufficiently institutionalised and that limited disclosure of appointment criteria can weaken accountability and board effectiveness.

This is highly relevant to the present discussion.

The reconstitution of the nine boards should therefore not simply be about replacing names.

It presents an opportunity to demonstrate a new standard of public-sector corporate governance.

Reconstitution must be about skills, not merely seats

The new boards should be constituted without unnecessary delay, but speed must not come at the expense of quality.

Appointments should begin with the question:

What competencies does this institution require around its boardroom table?

Depending upon the institution, that may require expertise in finance, accounting, law, corporate governance, risk management, petroleum, banking, engineering, infrastructure, technology, cybersecurity, human resources, sustainability, procurement, investment and strategy.

A proper board skills matrix should precede appointments.

The objective should not be to find positions for individuals.

The objective should be to find the right individuals for the positions.

That distinction is fundamental to good corporate governance.

Institutional memory must also be protected

There is another cost associated with wholesale dissolution that deserves attention: loss of institutional memory. Directors accumulate knowledge.

They understand ongoing negotiations, historical decisions, unresolved audit matters, strategic assumptions, major contracts and the reasoning behind previous board decisions.

When an entire board disappears simultaneously, that institutional knowledge may disappear with it.

This does not mean boards should never be dissolved. It means that succession must be managed.

Where no misconduct or performance concern attaches to particular directors, staggered appointments, retention of selected members or structured board handover arrangements can preserve institutional memory while still allowing renewal. Corporate governance values both renewal and continuity. They need not be mutually exclusive.

There are economic consequences

Governance stability has economic value.

Investors, lenders, development partners, contractors, employees and regulators pay attention not only to financial statements but also to the predictability and quality of institutional decision-making.

The IMF’s September 2026 assessment is particularly important in this respect because it identifies continuing fiscal vulnerabilities associated with Ghana’s SOE sector, including growing liabilities and risks concentrated in some major enterprises.

A governance vacuum within economically important state enterprises therefore cannot be treated as an isolated boardroom matter.

It can become a fiscal issue.

It can become an investment issue.

It can become a risk-management issue.

And ultimately, it can become an economic issue.

What Should Ghana Do Differently?

The September episode presents an opportunity for Ghana to strengthen its approach to state-enterprise governance.

Where boards must be dissolved, government should, where legally and practically possible, provide sufficient explanation to distinguish policy restructuring, collective board failure and individual misconduct.

Interim governance arrangements should clearly identify who exercises board-reserved powers during the transition. Replacement boards should be constituted within a reasonably defined period rather than an indefinite “in due course.”

Appointments should be driven by documented competency requirements and board skills matrices.

Individual directors should be assessed on their own records rather than automatically carrying the reputational consequences of collective dissolution.

And where former directors possess valuable expertise and no adverse finding has been made against them, there should be no governance reason to impose an informal blacklist merely because a board on which they served was dissolved.

Conclusion: Institutions must outlive governments

The dissolution of nine governing boards on 2 September 2026 presents Ghana with more than an administrative question. It presents a corporate governance test.

Government must retain the authority to intervene where public boards fail.

No board should regard appointment as an entitlement to remain indefinitely regardless of performance.

But the exercise of that authority should coexist with transparency, institutional continuity, due process, merit-based appointments and protection of the legitimate reputations of individuals.

Boards exist for a reason. They provide oversight, strategic direction, risk governance and accountability.

Management can maintain daily operations temporarily, but management cannot indefinitely provide independent oversight of itself.

Equally, dissolution of a board should not automatically become a verdict on the professional integrity of every director who served on it.

Where there is wrongdoing, identify it and deal with it through the appropriate process. Where there is poor performance, demonstrate it.

Where restructuring is the objective, explain it.

Where an individual remains competent, experienced and fit to serve the Republic, his or her expertise should not automatically be discarded merely because a board on which that person served was dissolved.

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Ultimately, this debate should not be reduced to President Mahama, the present administration or even the nine affected institutions.

Governments will come and go. Ghana’s institutions must remain.

The enduring objective should therefore be to build a public-sector governance culture in which boards are appointed on merit, evaluated on performance, held accountable for clearly defined responsibilities, removed through transparent processes where necessary, and replaced without creating prolonged governance vacuums.

That is how strong institutions are built.

And strong institutions are indispensable to a strong economy.

About the Author.

Divine Akotia, CGA (Certified Governance Auditor) Former COO at CIRIP-GHANA

He is the West African Regional Director, Community Services & Development at IHRPS and Director of Projects and Infrastructure at KYC NATIONS LTD.

divineakotia2014@gmail.com

REFERENCES

1. Organisation for Economic Co-operation and Development (OECD) (2024). OECD Guidelines on Corporate Governance of State-Owned Enterprises 2024. Paris: OECD Publishing. See particularly Chapter VI on the composition and responsibilities of SOE boards.
2. State Interests and Governance Authority (SIGA). Code of Corporate Governance for Specified Entities and Public Service Organisations in Ghana. Accra: SIGA.
3. Bank of Ghana (2018). Corporate Governance Directive 2018. Accra: Bank of Ghana. Issued pursuant to the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).
4. Republic of Ghana (2019). Companies Act, 2019 (Act 992). Accra: Ghana Publishing Company. See provisions governing directors, directors’ duties and disqualification.
5. OECD (2024). OECD Guidelines on Corporate Governance of State-Owned Enterprises 2024. See Chapter II and accompanying annotations concerning the State’s ownership role, transparent and merit-based board nomination processes, board independence and removal of directors for good cause.
6. Republic of Ghana (2019). State Interests and Governance Authority Act, 2019 (Act 990). Accra: Ghana Publishing Company.
7. Government of Ghana/State Interests and Governance Authority (2023). State Ownership Policy. Accra: SIGA. See particularly the principles concerning sound corporate governance, competent and diverse boards, transparency, board autonomy, board evaluation and risk management.
8. International Monetary Fund, Fiscal Affairs Department (2026). Ghana: Technical Assistance Report—Advancing SOE Fiscal Risks Management, Financial Oversight, Governance, and Investment Implementation. IMF Technical Assistance Report, Volume 2026, Issue 073, 9 September 2026. DOI: 10.5089/9798229060073.019.
9. Republic of Ghana (2016). Public Financial Management Act, 2016 (Act 921). Accra: Ghana Publishing Company.

About The Author