The International Monetary Fund (IMF) has raised concerns about the politicisation of boards and chief executive appointments at the country’s State-Owned Enterprises (SOEs), saying it remains highly political and centralised in the Presidency despite efforts to establish a more structured and merit-based system.
According to the IMF Technical Assistance Report, boards of major SOEs are largely dominated by political appointees, with board chairs frequently being ministers, Members of Parliament (MPs) or prominent party officials.
The report cited the Ghana Ports and Harbours Authority (GPHA), which its 10-member board is chaired by the National Chairman of the governing National Democratic Congress (NDC), Johnson Asiedu Nketia, as an example.
It also noted that the board of the Volta River Authority (VRA) included prominent politicians alongside technocrats and a traditional leader.
The IMF said the situation represented a significant departure from the Organisation for Economic Co-operation and Development (OECD) guidelines, which caution against active politicians serving on SOE boards and emphasise independent and professional majorities.
The report said Ghana was formally developing a more structured, merit-based nomination framework for SOE boards and chief executive officers, but the framework was still at an early stage of implementation.
It said the framework required the government, through the State Interests and Governance Authority (SIGA), to identify, vet and shortlist candidates for board and chief executive positions, establish a pool of potential directors and define due processes for removals based on Cabinet-approved benchmarks.
The framework also requires mandatory corporate governance training for newly appointed SOE board members, with additional training based on the outcomes of annual board evaluations.
However, the IMF said in practice, chief executive appointments remained largely political, with SOE boards playing only a limited role in the selection process.
It said chief executives or managing directors were typically appointed by the President, often in consultation with the relevant minister, rather than being selected through a competitive process and appointed by the respective SOE boards.
The report said the arrangement weakened the accountability link between board oversight and management performance.
“Boards can influence CEO tenures informally but are not the ultimate decision-makers,” the IMF said, adding that the arrangement could discourage boards from robustly challenging management.
It said the situation could also incentivise chief executives to respond more to political principals than to their boards.
The IMF further observed that formal and transparent procedures for selecting and appointing SOE board members and chief executives remained insufficiently articulated and institutionalised.
It said appointments at some entities were not guided by clear merit-based criteria, competency profiles or standardised vetting procedures, thereby increasing the risk of politicisation and weakening accountability.
According to the report, such weaknesses could undermine the effectiveness of SOE boards, dilute fiduciary responsibility and adversely affect the performance of state-owned enterprises.
It said strengthening the appointment processes in line with international good practice was therefore necessary.
The IMF also said that although the ultimate authority to appoint SOE board members and executives rested with the President, the absence of clear and transparent selection procedures could undermine the President’s ability to identify and appoint the best talent for the positions.
It further raised concerns about limited public disclosure of the criteria used for appointments and the outcomes of board evaluations.
The report said this contrasted with OECD guidelines and international best practice, under which ownership entities typically publish competency frameworks for directors, use open or professional search processes and disclose the skills composition of boards.
The IMF acknowledged recent reforms by SIGA to introduce greater structure and capacity into the appointment process, including the development of a pool of directors, governance training and annual board evaluations.
It, however, said SIGA continued to face difficulties in finding enough suitably skilled and experienced candidates, particularly in technical sectors.
The IMF urged the government to encourage SOE board members to undertake structured training programmes in corporate governance and board effectiveness to strengthen oversight, improve decision-making and support better financial performance.
By Ernest Kofi Adu