From “Ruins” to Gains: SIGA Endorses for Profit-Driven & Performance-Based Compensation in SOEs

After many concerned Ghanaians and experts have pushed for the culture of profit-oriented and performance-based remuneration within Ghana’s State-Owned Enterprises, the State Interests and Governance Authority (SIGA) is endorsing the call, adding that such reforms will salvage the canker of inefficiencies.

Many corporate governance practitioners, such as Dr. Kwabena Donkor, have trumpeted on various occasions that the state must tie the rewards of the leadership of SOEs to profitability and dividend payments.

The proponents of this call believe that if the leadership of the SOEs has their “skin in the game,” it will propel efficiency, which can salvage the state’s companies from persistent losses draining the country’s resources.

In its 2024 State Ownership Report cited by The High Street Journal, SIGA did not mince words by indicating that the days of “business-as-usual” at SOEs must end.

The authority agrees that linking executive compensation and performance metrics to dividend outcomes is the surest way to jolt state firms into higher efficiency and accountability.

SIGA endorses that a performance-driven culture should no longer be just a slogan; it is a demand. Rewarding results rather than routine, SIGA believes executives and employees alike will be motivated to innovate, cut waste, and deliver real value to shareholders, chief among them, the Ghanaian taxpayer.

“It is important to note that a performance-driven culture that prioritizes profitability and dividend payments can lead to significant improvements in the operational efficiency of SOEs,” SIGA remarked in the report.

It added that, “Linking executive compensation and performance metrics to dividend outcomes can motivate better performance across all levels of the organization.”

When CEOs know their monthly salaries and bonuses are pegged to dividends, complacency shrinks, creativity grows, and entire organizations rally around measurable results.

Encouraging a results-oriented mindset, according to SIGA, will foster a new culture where accountability is prized and mediocrity has no place.

With SIGA endorsing this long-held call, it is expected that Ghana’s SOEs, ranging from power utilities to transport companies, will witness a drastic reform that puts this call into action.

Considering the current economic situation of the country, Ghana cannot afford SOEs that continue to underperform. It is time to reward results, punish waste, and make every cedi count.

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