Banking scandals: What lessons for future generations?

Addison BoG GOVERNOR11 Dr Ernest Addison, BoG Governor

Thu, 16 Aug 2018 Source: Kwaku Antwi-Boasiako

Emotions are running high in Ghana, in the face of the collapse of several Ghanaian banks and many ongoing revelations about the role of shareholders, CEOs, directors, managers, related parties, debtors, Bank of Ghana officials, et cetera.

There is anger about taxpayer bailout just as much as there is clamour for prosecutions. While all this is going on, I hope somewhere in a private study or a private library someone is less engrossed by the blockbuster details of the backstories of these banking scandals and corporate failures, and more focussed on documenting, with academic and historical lenses, key issues and lessons for the benefit of future generations.

In Ghana, we are often too judgemental to even make an effort to learn any lessons from the failure of others. There is a saying that, if you have never fallen before, you don’t know how to get up when you fall. Recently, a successful Ghanaian entrepreneur said at a meeting that he and his business associates often prefer to hire top executives who have previously failed in other positions.

In the current banking scandal atmosphere, many Ghanaians would chase you out of town and scoff at such a suggestion, without giving it a second thought. In truth, many ex-employees of the failed banks are currently struggling to get another job in the financial sector.

Yet, if you think about it, a person who has failed in a particular endeavour at least knows one or two ways of how NOT to do things in that particular sector. There is a difference between criminal conduct and failure. For a person who criminally manipulate a system for personal gains, that person already knew how to do the right thing but chose to act criminally. But then there are those whose actions resulted in unintended consequences, leading to failure. This second category of people are better able to succeed when given a second chance.

The current banking scandals offer academics and historians an opportunity to develop local case studies in several disciplines - corporate governance, banking supervision, financial management, auditing, regulatory compliance, corporate ethics, et cetera, et cetera.

I have often wondered why successive governments in Ghana adopt hostile attitude towards their predecessors instead of learning lessons from their failures, perceived or real. However, you despise the previous government, even if there is nothing positive to learn from them, you can learn how not to do a few things.

Take ex-President Rawlings, for example. He was in power uninterrupted from 1981 to 2000, nineteen odd years. How can you tell me there is nothing to learn from him and his ministers over the period? Yet, the hostile atmosphere that existed between the Kufuor Administration and Rawlings, and subsequently within the NDC itself, has denied the country any useful lessons (whether on how to run a country or how not to run a country) from President Rawlings and his Administration.

You can say the same thing for how President Kufuor and President Mahama have also been treated. Sadly, our governments almost invariably repeat the same mistakes of their predecessors and the ordinary Ghanaian has been often worse for it.

Maybe for the first time, let us consciously make the effort to document these banking scandals and failures with the view to helping future generations with case studies that would give them a better chance of success.

Columnist: Kwaku Antwi-Boasiako
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