Collapse of indigenous banks due to corporate governance failure – Banking consultant

A renowned banking consultant has blamed the collapse of indigenous banks on the failure of corporate governance.

 Dr Williams Atulik said non-functioning loans and bad capital adequacy ratio are as a result of the failure of management to do as expected of them.

“I will attribute a lot of these failures to board level and senior management inaction or acting in a manner that rather inures to their personal interest,” he bemoaned.

He observes most of the non-performing loans are advanced to related parties.

“We understand huge portfolios which have not been paid back are given to people who are very close to the very strong people at the top level. When that tone is set from the top signal is given and it trickles down,” he added.

Dr. Atulik was speaking at the first in a series of Practitioners’ Forum on Corporate Governance and Businesses Ethics in Kumasi.

UT, Capital and Unibank have recently suffered setbacks in a manner some refer to us collective national failure.

Dr. Atulik admits the Central bank has also failed in its bid to adequately manage its cooperate governance.

He challenged junior staff of banks to play monitoring roles and report infractions to appropriate quarters.

"We interviewed the junior staff and they seemed not to know what is going on,” he said.

The former board member of Tema Oil Refinery (TOR) advocates the establishment of risk committees which many businesses lack.

According to him, this is essential for forecasting future problems and managing them properly.

Independent board members, openness, credibility are among other practices, he points out, will lead to survival of businesses.

The Practitioners Forum is organized by the Institute of Distance Learning, Kwame Nkrumah University of Science and Technology.

The programme is aimed at enriching class work.

Deputy Director, Dr Ahmed Agyapong expects the transformation triggered by the interaction will lead to improvement in the workplace.

Registrar of Kwame Nkrumah University Science and Technology (KNUST), Andrews Boateng says the initiative is in line with the University’s vision of coming out with innovative, technologically driven, sustainable and flexible to opportunities for busy professionals.