In today’s increasingly complex corporate landscape, corporate governance has become more than just a regulatory requirement — it is the bedrock of sustainable business success.
The relationship between the Board of Directors and the Executive Management lies at the heart of corporate governance. When this relationship is cohesive, transparent, and accountable, organizations thrive; when it is adversarial or blurred, failure is almost inevitable.
Understanding corporate governance
Corporate governance refers to the systems, principles, and processes by which companies are directed and controlled.
It defines the distribution of rights and responsibilities among different participants — shareholders, boards, executives, regulators, and other stakeholders — and outlines the rules for decision-making within the organization.
Good corporate governance promotes accountability, fairness, transparency, and responsibility in corporate affairs provides a framework for attaining a company’s objectives and ensures that interests of stakeholders are aligned.
According to the OECD Principles of Corporate Governance (2023), the essence of governance is to foster an environment of trust, integrity, and ethical behaviour necessary for financial stability and economic growth.
The role of the board
The Board of Directors is the apex of corporate governance.
Its primary responsibility is to provide strategic direction and oversight while safeguarding the interests of shareholders and other stakeholders.
Key roles of the Board include:
Setting vision and strategy
The Board defines the long-term vision, mission, and strategic priorities of the organization, ensuring that management decisions align with these goals.
Oversight and accountability
Directors monitor management performance, ensure financial integrity, and oversee risk management systems.
Policy and governance framework
The Board establishes governance policies that promote ethical conduct, compliance, and sustainability.
Leadership selection and succession
Appointing, evaluating, and, where necessary, replacing the Chief Executive Officer (CEO) is one of the Board’s most critical functions.
Stakeholder engagement
The Board must maintain effective communication with shareholders, regulators, and other stakeholders to build trust and legitimacy.
In Ghana, the Securities and Exchange Commission (SEC) Corporate Governance Code (2020) and the Bank of Ghana’s Corporate Governance Directive (2018) both emphasize that Boards should not be ceremonial bodies but active custodians of governance who provide effective oversight.
The role of executives
While the Board sets the direction, Executives — led by the CEO — are responsible for implementation.
Their role involves operational management, policy execution, and ensuring that strategic objectives are achieved.
Executives must foster a culture of performance, ethical leadership, and accountability.
They must ensure that employees understand and adhere to the corporate vision and values, while reporting transparently to the Board on progress and challenges.
A high-performing executive team must also be responsive to Board oversight while maintaining the autonomy necessary for innovation and operational efficiency.
Building a cohesive corporate environment
A cohesive corporate environment arises when the Board and Executives operate in harmony, with clearly defined roles, mutual respect, and shared commitment to corporate success.
The following principles can strengthen this cohesion:
Clarity of roles
The boundary between governance (Board) and management (Executives) must be respected. Overlap leads to confusion; detachment leads to failure.
Effective communication
Regular, transparent communication between the Board and Executives prevents misunderstanding and promotes trust.
Ethical leadership
Both Board and Executives must demonstrate integrity, accountability, and fairness in all dealings.
Continuous capacity building
Directors and Executives should undergo regular training on governance best practices, risk management, and ESG (Environmental, Social, and Governance) principles.
Performance evaluation
Periodic Board and Executive evaluations enhance accountability and continuous improvement.
A 2022 report by the Chartered Governance Institute UK & Ireland emphasizes that the best-performing organizations are those where Boards and Executives share a collaborative relationship built on transparency, respect, and a shared sense of purpose.
The Ghanaian context
In Ghana, the recent transformation of governance frameworks across financial institutions and state-owned enterprises has reaffirmed the need for robust Board–Executive relationships.
The Bank of Ghana’s post-cleanup reforms, the Companies Act, 2019 (Act 992), and the Corporate Governance Code for Listed Companies (SEC, 2020) collectively provide a strong regulatory foundation.
However, effective governance goes beyond compliance — it demands leadership discipline, ethical behavior, and institutional culture that prioritize sustainability over short-term gain.
Many corporate failures in Ghana’s financial and public sectors can be traced to a breakdown in Board–Executive cohesion, where oversight was weak, and accountability blurred.
Conclusion
Corporate governance is not merely a corporate ritual; it is a strategic necessity.
The success or failure of any organization largely depends on how effectively the Board and Executives collaborate in an environment of trust, integrity, and transparency.
As Ghana continues to strengthen its corporate governance landscape, both Boards and Executives must see themselves not as competing centers of power but as partners in progress — jointly responsible for steering the organization toward sustainable success.
References
Organisation for Economic Co-operation and Development (OECD) (2023). OECD Principles of Corporate Governance.
Securities and Exchange Commission, Ghana (2020). Corporate Governance Code for Listed Companies.
Bank of Ghana (2018). Corporate Governance Directive for Banks and Specialised Deposit-Taking Institutions.
Chartered Governance Institute UK & Ireland (2022). Board–Executive Relations Report.
Companies Act, 2019 (Act 992), Republic of Ghana.
Institute of Directors–Ghana (IoD–Ghana) (2021). Best Practice Guidelines on Corporate Governance.
The writer is a Certified Governance Auditor. He is currently the National President of the International Human Rights Protection Service (IHRPS-Ghana)
By DIVINE AKOTIA
Email: divineakotia2014@gmail.com
