‘Appointing CEOs before boards unhealthy’

Power struggle at a struggling Ghana Cylinder Manufacturing Company is evidence of a public administration system gone wrong hence the need to change the law, a professor has observed.

Professor Justice Bawole, who is the Head of Department of the Public Administration and Health Services Management, University of Ghana, has indicated that chief executive officers (CEOs) appear emboldened to stand up to the company’s board because they pre-exist the boards meant to check their work.

According to him, one such CEO is GCMC’s Madam Frances Essiam who was accused of causing a temporary shutdown of the company to block a board meeting at the company’s premises to discuss her possible suspension.

She was later suspended by the board, which said the CEO’s decision to sack the company’s finance manager without recourse to the board was wrong.

The CEO who has the support of the workers also accused the Board of trying to micromanage the company.

Intervening, the State Enterprises Commission has set up a committee to look into issue that has pit the Board and the management against each other.

Discussing the controversy on Newsfile Saturday, the professor said Ghana’s corporate governance set-up fuels these clashes.

Referring to the constitution, he said “the President is required to appoint a CEO for state-owned companies after consulting the Board and the Public Services Commission. But there is also a 2012 law that sends these CEOs packing once a new government is sworn in”.

This, he said, compels the new president to appoint acting CEOs to manage the companies while he prepares to assemble a Board which can take a long time.

The board, once constituted, rubberstamps the president’s acting CEO, a situation the university don described as “inappropriate.”

“So the board is completely disabled from being able to advise the president before he nominates [a person as CEO],” the professor said suggesting the current system puts the cart before the horse.

“It de-stabilises the board from having authority”, he continued.

He said the CEOs tend to feel they do not have to report to the Board because; the appointing authority played an inconsequential role in the process of appointment.

“If I am nominated in the interim by the President, I owe allegiance to the president especially if I am politically connected”.

This, he said, was the case at the GCMC where Frances Essiam, an Akufo-Addo loyalist, was managing.

“She has shown gross respect to the board,” the Professor said and expressed doubt that the two factions can reconcile their differences.

He also berated boards that have “turned themselves into management,” an accusation the embattled CEO has alluded to be the case at her company.

“In some cases, the Board chair goes to work on a daily basis”, he flagged this practice as wrong.


Story: News Desk

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