HFC bank has responded to issues of corporate governance on its board disclosed by the Social Security and National Insurance Trust (SSNIT) recently.
SSNIT in its capacity as a shareholder of HFC had earlier raised concerns about the governance structure of the bank and requested the board of HFC on its own to make changes to increase and broaden its representation on the board.
[contextly_sidebar id=”nxo8j6YFMriHCBNLJtotKfU4spWGyBQi”]However, HFC bank has in a statement indicated that it has not breached any regulations with regards to the current composition of executive directors of the board.
SSNIT had in a letter dated October 24 asked HFC to broaden its board representation to protect Shareholder interest but HFC Bank says, the current composition of the its board is in compliance with applicable Ghanaian Law and any other relevant corporate governance standard or best practice.
It currently has three executive directors including the Managing Director and seven non executive directors out of a total of 10 directors.
The Managing Director of the Bank, Asare Akuffo, Charles Ofori Acquah-Executive Director for Business Development and Osei Asafo-Adjei are the current executive directors.
In its earlier statement, SSNIT described the board as a skewed management-led because the three executive directors along with the two independent directors act as a bloc on the board without regard to shareholder interest.
But HFC says it has been the practice that any two shareholders with a minimum aggregate shareholding of either 12.5percent or 25 percent can collaborate to appoint a director of directors.
SSNIT also added that because HFC refused to effect any change to have a more broader representation to protect shareholder interest, it decided to invoke the provisions of section 297 of the companies act 1963 to requisition an EGM initially scheduled for January 20 to;
Remove one Executive Director and two independent directors and then have the EGM appoint three new directors to fill the resulting vacancies to protect shareholder interest.
But HFC Bank has responded by saying there is no vacancy currently on its board as constituted.
The bank says its board must have a minimum of 6 and a maximum of 11 directors; it adds that the maximum of 11 is a ceiling and not a mandatory legal requirement on the number of directors for the HFC bank. There is therefore no pressing need to have the full complement of 11 directors; the Statement added.
By: Lorrencia Nkrumah/citifmonline.com/Ghana