As part of ensuring sanity in the banking industry, the regulator, Bank of Ghana is looking to achieve more transparency. BOG has already laid some governance guidelines for key management and boards for the banking sector.
The regulator intends to scrutinize compensation policies for Chief Executive Officers and key management personnel as well as Board of Directors of universal banks. To ensure transparency, banks will be required to publish Value Added Statements disclosing details of the compensation packages of the persons afore-mentioned. Their packages would be published separately from total employee compensation.
This is also in a bid to ensure that banks do not pass on their operational inefficiencies and overhead costs to their clients. To do this, steps will be taken to align compensation with overall bank performance. Compensation would be clearly linked to parameters including the quality of a bank’s assets.
This a global issue where stakeholders show keen interest in how much their directors are being paid. Many blue chip companies have been cited paying huge sums money to their CEOs even when those companies are failing or breaching regulations.