Most Ghanaian SME founders dismiss corporate governance as something only large corporations need to worry about. This is a costly misconception. Good governance separates businesses that scale from businesses that stagnate — and it's what investors, banks, and partners look for before committing money.
What Is Corporate Governance?
Corporate governance is the system of rules, practices, and processes by which a company is directed and controlled. At its simplest: who makes what decisions, how those decisions are made, and how the company is held accountable.
Why It Matters for Your SME
- Investor readiness: Private equity funds and serious angel investors will not invest in a company with poor governance — no board minutes, no financial controls, founders acting unilaterally
- Bank credit: Banks assess governance quality when approving larger loans
- Dispute prevention: Clear governance rules prevent co-founder and shareholder disputes
- Fraud prevention: Financial controls protect against employee theft
- Business continuity: The company doesn't collapse if the founder is absent
The Board of Directors
Every limited company in Ghana must have a board of directors. For SMEs, this is often just the founders — but treat the board seriously:
- Hold formal board meetings at least quarterly
- Set an agenda in advance and circulate it
- Keep written minutes of every meeting
- Ensure decisions are formally resolved and recorded
- Have at least one independent director if possible — someone with no financial interest who can provide objective oversight
Board Meetings: What to Cover
A typical quarterly board meeting agenda for an SME:
- Approval of previous minutes
- Financial review — management accounts for the period
- Key performance indicators vs targets
- Major decisions requiring board approval
- Risk review
- Any other business
Minutes: Why They Matter
Board minutes are the official record of what was decided. They:
- Protect directors by showing decisions were properly made
- Provide evidence in shareholder disputes
- Required by banks and investors when they conduct due diligence
- Required by the Companies Act for certain resolutions
Minutes don't have to be lengthy — but they must be accurate and signed by the chairperson.
Financial Controls
Basic financial controls every SME should have:
- Segregation of duties: The person who approves payments should not be the same person who makes them
- Dual signature for significant payments: Require two signatories for payments above a threshold (e.g., GHS 5,000)
- Monthly management accounts: Profit & loss, balance sheet, cash flow — reviewed by the board
- Annual external audit: Even small companies benefit from independent review
- Separate business and personal accounts: Never mix them
Shareholders' Register
The Companies Act requires every company to maintain a shareholders' register showing: names and addresses of all shareholders, number of shares held, date of acquisition, and any transfers. Keep this up to date.
Annual General Meeting (AGM)
Companies must hold an AGM each year. At the AGM: financial statements are presented, directors may be re-elected, dividends declared, and auditors appointed. Document this with minutes.
Getting Started: The Minimum Package
For an early-stage SME, the minimum governance package is:
- Updated shareholders' register
- Written shareholders agreement
- Quarterly board meetings with minutes
- Separate business bank account
- Monthly management accounts
- Annual external audit
Use our free Business Structure Finder. Read about shareholders agreements and directors' legal duties.