BoG Orders Annual Fit and Proper Tests for Bank Boards
By Praisebell Rosemond Larbi
The Bank of Ghana (BoG) has directed all accountable financial institutions to conduct annual fit and proper assessments for board members and key management personnel, as part of efforts to strengthen governance, accountability and risk management across the financial sector.
The central bank has also made it mandatory for such assessments to be carried out prior to the appointment of any director or key management officer, stressing that no individual should assume a critical role without first satisfying regulatory standards on integrity, competence and financial soundness.
The directive was disclosed during a questions-and-answers session on the Bank of Ghana’s newly issued Guidelines on Fit and Proper Persons for Accountable Institutions, which form part of broader reforms aimed at safeguarding the stability of the financial system.
According to the BoG, accountable institutions are required to undertake comprehensive due diligence as part of the assessment process. This includes verifying all material information provided by prospective or existing appointees through independent and reliable sources, rather than relying solely on self-declared disclosures.
The central bank outlined an extensive list of documents that must be submitted during the fit and proper assessment. These include a formal application letter, an updated curriculum vitae, a completed personality note form, a valid tax clearance certificate, and a certified financial statement of affairs. Institutions must also obtain copies of academic and professional certificates, a police report, an enhanced due diligence questionnaire, and regulatory references covering a minimum period of six years.
Where applicable, candidates are also required to submit a bankruptcy or insolvency certificate. In the case of corporate entities, full beneficial ownership disclosures must be provided to ensure transparency and prevent conflicts of interest or regulatory arbitrage.
The Bank of Ghana further clarified the respective responsibilities of boards and management under the new framework. Boards of directors are expected to appoint only qualified directors and key management staff, conduct due diligence prior to all appointments, and establish a robust Fit and Proper Policy within their institutions. Boards are also required to oversee assessments related to outsourcing arrangements and ensure the ongoing competence, integrity and suitability of board members and key personnel.
Key management, on the other hand, is tasked with conducting fit and proper assessments for middle and lower management staff, submitting assessment findings to the board, and ensuring that annual assessments are carried out for heads of critical control functions. These include Risk Management, Compliance, Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT), and Internal Audit.
The central bank warned that failure to meet fit and proper requirements carries serious consequences. Where an individual is found not to be fit and proper, the Bank of Ghana may reject or revoke the appointment, or issue a prohibition order of up to 10 years. Such an order could bar the individual from holding shares, serving as a director, or performing any key function within an accountable institution.
The BoG said the measures are intended to promote sound corporate governance, enhance public confidence in the financial system, and prevent misconduct that could undermine financial stability.
