Directors' Duties under the 2019 Ghanaian Companies Act

Abstract

The scope of directors’ duties forms perhaps the most important part of corporate governance. This paper measures the trajectory of the regulation of directors’ duties under Ghanaian company law from the Companies Act, 1963 (Act 179) to the Companies Act, 2019 (Act 992). It considers whether the scope, formulation and structure of directors’ duties within the new legislation is capable of promoting corporately beneficially director behavior. It also discusses whether framework is apt to deal with the recent lapses in corporate governance exemplified by opportunistic and reckless director behavior which have been identified as part of the cause of the mass of insolvencies in systemically important parts of the Ghanaian economy between 2017 and 2019. It discovers that Act 992 places a greater reliance on specific rules while maintaining the usual principle-based regulatory technique adopted for regulating director conduct under Act 179. The overall tenor of the framework of director’s duty under the new Act points to a firmer legislative view of the serious consequences of reckless director conduct. The paper concludes that the language of the framework for directors’ duties is capable of promoting corporately beneficially director behavior and is also apt to deal with the recent lapses in corporate governance which led to the financial sector insolvencies in Ghana.