The principal legislation affecting the governance of listed companies is the Companies Act, 1963 (Act 179). The Companies Act includes general provisions relating to the organisational framework of all companies, both public and private, as well as special provisions for public companies only, relating to invitations to the public for the acquisition or disposal of listed securities, standards for financial reporting, procedures for appointing directors, etcetera. Apart from the Companies Act, other relevant legislation that affects the governance of listed companies includes the Securities Industry Act, 2016 (Act 929) and the Securities and Exchange Commission Regulations, 2003 (LI 1728), which regulate public invitations for and trading in listed securities, as well as disclosure obligations and financial reporting standards for listed companies.
The Listing Rules of the Ghana Stock Exchange (Listing Rules), the Code on Takeovers and Mergers (Takeover Code) issued by the Securities and Exchange Commission (SEC) and the SEC's Code of Best Practices on Corporate Governance (Corporate Governance Code) are also key to the governance regime of listed companies. The Listing Rules is a comprehensive rulebook that sets out various rules and guidelines on the governance of companies listed on the Ghana Stock Exchange (GSE). It prescribes mandatory disclosure obligations for issuers of listed securities, rules on board governance, and practices and protections in respect of shareholders' rights. The Takeover Code regulates takeovers and mergers by, between or affecting public companies. The Corporate Governance Code contains principles, guidelines and recommendations for ensuring the effective governance of listed companies. Sector-specific legislation, such as the Banks and Specialised Deposit Taking Institutions Act, 2016 (Act 930), the Insurance Act, 2006 (Act 724) and their respective regulations, also contain important provisions that affect listed companies operating within the relevant sectors, particularly in relation to board composition and governance.
The SEC, together with the GSE and the Registrar of Companies, bear the primary responsibility for overseeing the listed company regime in Ghana. However, there are other supervisory bodies (such as the Bank of Ghana for the banking sector and the National Insurance Commission for the insurance industry) that regulate listed companies operating in specific sectors of the economy. The SEC is empowered under its enabling law to impose administrative penalties for non-compliance with its codes, directives, guidelines and circulars. With respect to instances of non-compliance that also constitute criminal offences, prosecutorial powers are administered by the Attorney General, who may authorise the SEC to prosecute such offences on his or her behalf.
The GSE enforces compliance with its rules through sanctions such as the suspension or delisting of listed companies. A listed company may be suspended from the exchange or its securities delisted for non-compliance with the GSE's rules on disclosure and its policy on quality management of listed companies. Where a listed company has disposed of its principal assets or discontinued a significant portion of its operations without shareholder approval, or persistently failed to comply with GSE and SEC rules and directives, it could also be suspended or delisted. The Registrar of Companies is also authorised, under the Companies Act, to impose penalties on companies in respect of breaches of the mandatory provisions of the Companies Act, and by so doing ensure compliance with the Companies Act. The Registrar of Companies may also go to court to compel compliance with the requirements of the Companies Act.
The corporate governance regime for listed companies in Ghana is essentially a combination of statutory law, subsidiary legislation and regulatory guidelines and directives. The Corporate Governance Code does not have the force of law, and is merely used as a benchmark for assessing the governance practices of listed companies and companies that operate within the securities industry. However, some regulators in the financial services sector have developed detailed mandatory guidelines on governance structures and control systems for regulated companies, non-compliance with which could have adverse implications on their licences. For instance, the National Insurance Commission has developed governance and risk management guidelines for both life and non-life insurers. The detailed framework provides the minimum standards for the corporate governance structures and internal control systems that insurers must comply with. This includes board composition, mandatory board committees and their composition, their mandate and responsibilities, and audit and risk control functions. Another sector that has seen steady development in corporate governance practices is the banking sector. The Bank of Ghana (BoG) issues notices and directives on governance structures and control systems for banks and specialised deposit-taking institutions in line with the corporate governance principles of the Basel Committee on Banking Supervision. Following the collapse of a number of banks, in December 2018 the BoG released a comprehensive corporate governance code (BoG Directive) for the banking industry, specifically banks, savings and loans companies, finance houses and financial holding companies licensed or registered under the Banks and Specialised Deposit Taking Institutions Act, 2016 (regulated financial institutions). Unlike the Corporate Governance Code, compliance with the BoG Directive is mandatory, and in some cases it provides deadlines for its implementation.
More detailed information regarding corporate governance rules applicable to listed companies in Ghana is available at https://thelawreviews.co.uk/edition/the-corporate-governance-review-edit...
Securities and Exchange Commission Ghana
No. 30, 3rd Circular Road,