Two experts in banking and corporate governance have questioned the basis on which the Bank of Ghana (BoG) approved Pastor Mensa Otabil as Board Chairman of the now defunct Capital Bank.
A retired Deputy Governor of the BoG, Mr Emmanuel Asiedu-Mante, and a private consultant on corporate governance in banking, Dr Richmond Atuahene, said Pastor Otabil was unfit to chair the board because he neither had practical expertise nor theoretical knowledge in banking, finance and economics to chair the board, which was to give policy direction for the efficient and effective running of the bank.
Dr Atuahene said guidelines on corporate governance principles for banks issued by the Basel Committee on Bank Supervision in 2015 required that a board chairman must have knowledge, experience, competences and skills to ensure effective running of the institution in the long term.
“As chairman, you are to ensure the long-term survivability of the bank. So if you help in running a bank down, you cannot plead alibi as far as corporate governance is concerned,” he said.
Mr Asiedu-Mante, who chairs the Board of Stanbic Bank Ghana, and Dr Atuahene were speaking to the Daily Graphic last Tuesday in response to a statement from the inspirational preacher and Founder of the International Central Gospel Church (ICGC) on the collapse of the Capital Bank on August 14, last year.
Pastor Otabil’s statement
Among other things, Pastor Otabil expressed sympathy to former employees of the bank who lost their jobs following the collapse of the bank.
While explaining that his role as a non-executive chairman meant that he was not involved in the day-to-day running of the bank, he added that he was cooperating with state institutions that were investigating the matter.
It was the first time he had spoken on the matter, 12 months after the central bank withdrew the licences of the Capital and the UT banks for being illiquid and deficient in capital.
Lack of expertise
Mr Asiedu-Mante and Dr Atuahene explained that Pastor Otabil’s lack of expertise in the sector made it easy for the management of the bank to mislead the board on issues relating to the health and efficiency of the bank.
“The onus should have been on the BoG to tell him: ‘My brother, you are a good minister of God; you preach the Word very well, but you do not have the expertise, skills and competences to be a chairman. Therefore, we cannot approve you’,” Dr Atuahene said.
The BoG is mandated by law to approve boards of directors for all the banks in the country.
Lack of appreciation
In a separate interview, the Chief Executive Officer of the Institute of Directors (IoD), Mr Justice Awuku-Sao, said although it was not illegal for Pastor Otabil to have been the board chairman, best practices required him to take steps to upgrade his knowledge in the operations of a bank.
“In other places, there are laws called corporate manslaughter; if you collapse a company like the Capital Bank, it is seen as killing a corporate institution and you can go to prison for that,” he explained.