- 20 Marks
CG – APR 2023 – L4 – Q1 – Impact of DDEP on Bank Governance and Capital Restoration Programme
Examine measures and procedures for capital restoration in a bank affected by DDEP, focusing on governance aspects.
Question
The Board of Goldbank Plc in Sikaman has observed that the recent Domestic Debt Exchange Programme (DDEP) has negatively affected the governance and decisions of the bank. The Board is particularly concerned about the impact it is having on its governance performance standards and structures.
A major observation is the impact of the DDEP on the balance sheet or statement of position of the bank. The DDEP has resulted in a significant reduction of the Common Equity Tier 1 (CET1) capital of the bank. The situation also suggests that the strategic corporate governance objective of securing or protecting shareholders’ assets has been undermined. You are aware of some regulatory forbearances including a period of capital restoration and restructuring deployed by the regulator. It appears many of the governance indices set for bank corporate governance control and monitoring have been breached, or do not seem to have any governance interpretation for decision-making.
The Board of Goldbank intends to engage you as a corporate governance consultant to help it to establish the full impact of the programme on the bank’s governance structures and mechanisms.
The Chairperson, Dr. Rita Agyei is particularly interested in the aspects that relate to the Capital Restoration Programme.
REQUIRED
(i) Critically examine the FIVE main corporate governance measures that should be taken by the Board towards its Capital Restoration Programme (CRP). (35 Marks)
(ii) Examine the governance procedures that should be implemented to co-ordinate the capital restoration programme in Goldbank Plc. (15 Marks)
(TOTAL. 50 MARKS)
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