Shareholders need more power

The Companies Act, which is currently undergoing amendment, should clearly spell out the role of shareholders and give them more power to participate in the activities of companies, a managing partner of the Ntrakwah and Co., a private legal firm, Mr Felix Ntrakwah, has advocated.

According to him, there was the need for the law to make the role of shareholders key in companies rather than reduce them to either concur or disagree at annual general meetings (AGMs), as is the case currently.

He said the Companies Act, 1963, Act 179 does not have a clear position for shareholders, making their stake in companies not strong and adequate.

That, Mr Ntrakwah described, as unfortunate and worrying, hence his call for the new law to address that anomaly.

Mr Ntrakwah was speaking at a consultative workshop for private businesses and start-ups in Accra. The forum was meant to consolidate the views of business owners to be incorporated into the Companies Act currently before Parliament for amendment.

Amendment

The Companies Act, 1963, Act 179 which is going through various stages before a final amendment, guides companies on doing business in the country.

Since 1963 when the Companies Act was promulgated, it has not been reviewed and many business people believe the Act is not abreast of current trends. The current process to review it has, however, been going on for close to 10 years.

It is expected that the Private Enterprise Federation (PEF), facilitators of the workshop, will submit a position paper to Parliament after collating the views of business owners, especially from the private sector before the amendment.

The forum was conducted with the support of the Ghana Institute of Management and Public Administration (GIMPA), Good Governance Africa (GGA), a research and advocacy group, and the Konrad Adenauer Stiftung (KAS), a German political advocacy organisation.

Some views

Mr Ntrakwah said there was the need for an intensive education to be carried out before the amendment of the Act. In his view, there was no proper education afoot to sensitise Ghanaians and the business community to the amendment exercise, noting that that was dangerous and could lead to lots of challenges should the Act be modified and passed into law.

Participants and expert committee members also made presentations and shared their views and opinions on what needed to be done to enrich the Companies Act.

Some participants also called on Parliament to incorporate tier systems. This should allow limited liability companies to be grouped under tier one, two or three depending on certain factors, such as the number of employees and capitalisation, to be spelt out in the law.

They also advocated for flexibility or modification of businesses to enable them to change the course for which they were originally set up, as against the current law which did not recognise that position.

The law must favour SMEs

The Chief Executive Officer of the PEF, Nana Osei-Bonsu, said there was the need for the new Act to create an enabling environment for small and medium enterprises (SMEs) to grow.

Nana Osei-Bonsu said there was the need for the Act to also promote the use of Information and Communications Technology (ICT) in businesses.