(a) Specific Rights of Ordinary Shareholders (15 marks)

Ordinary shareholders, also known as common stockholders, hold equity in a company and are entitled to certain rights under Ghanaian corporate law, primarily governed by the Companies Act, 2019 (Act 992), and the listing rules of the Ghana Stock Exchange (GSE). These rights are crucial for protecting shareholder interests, especially in multinational corporations (MNCs) like Republic Bank PLC, SG Bank PLC, and Standard Chartered Bank PLC, which operate under both local regulations and international standards. In the context of Ghana’s economic crises, where banks face earnings pressures from high inflation, currency depreciation, and the Domestic Debt Exchange Programme (DDEP), these rights enable shareholders to influence governance and seek accountability. Below are the key specific rights:

• Right to Vote on Key Matters: Ordinary shareholders have the right to vote at general meetings on critical issues such as the election or removal of directors, approval of major transactions (e.g., mergers, acquisitions, or asset sales exceeding certain thresholds under Act 992), and amendments to the company’s constitution. For instance, in a crisis scenario, shareholders could vote against executive compensation packages if earnings disappoint, ensuring alignment with performance. This right is exercised proportionally to shareholding, typically one vote per share.
• Right to Dividends: Shareholders are entitled to receive dividends when declared by the board, provided the company has distributable profits. Under Section 74 of Act 992, dividends must be paid from profits, and in challenging times like Ghana’s current fiscal strain, shareholders can challenge non-declaration if profits exist but are withheld for other purposes. For MNCs, this right is vital as foreign shareholders may expect remittances, subject to withholding taxes and BoG forex regulations.
• Right to Information and Transparency: Shareholders have access to the company’s financial statements, annual reports, and other material information via the GSE’s disclosure requirements and BoG’s Corporate Governance Directive 2018. This includes the right to inspect registers and attend meetings. In practice, during the 2017-2019 banking cleanup, shareholders of collapsed banks like UT Bank exercised this right to demand audits, highlighting governance lapses.
• Right to Residual Assets in Liquidation: In the event of winding up, ordinary shareholders have a claim on remaining assets after creditors and preferred shareholders are paid, as per Sections 300-320 of Act 992. This right underscores risk-sharing in crises, where MNCs might face asset impairments due to non-performing loans (NPLs) rising amid economic downturns.
• Pre-emptive Rights: Shareholders have the right to subscribe to new share issues proportionally to maintain their ownership stake, preventing dilution (Section 202 of Act 992). This is particularly relevant for recapitalization efforts, as seen in Access Bank Ghana’s post-cleanup capital raises to meet BoG’s minimum capital requirements under Notice No. BG/GOV/SEC/2023/05.
• Right to Sue for Wrongdoing: Through derivative actions (Section 211 of Act 992), shareholders can sue directors for breaches of fiduciary duty, such as mismanagement leading to poor earnings. This aligns with Basel III principles adapted in Ghana for risk management.
• Right to Transfer Shares: Freely transferable on the GSE, subject to market conditions, allowing exit during crises.

These rights empower shareholders to mitigate risks in Ghana’s volatile environment, fostering resilience and ethical practices.

(b) Businesses Likely to be Dealt with at the Annual General Meeting (15 marks)

The Annual General Meeting (AGM) is a statutory requirement under Section 157 of the Companies Act, 2019 (Act 992), and GSE rules, serving as a platform for shareholder engagement, especially for listed MNCs like the mentioned banks amid earnings challenges. AGMs typically occur within 15 months of the previous one, with notice periods and virtual options post-COVID under BoG guidelines. In Ghana’s crisis context, where banks grapple with DDEP impacts and high NPLs (e.g., over 20% industry-wide in 2023), AGMs focus on accountability and strategy. Key businesses include:

• Presentation and Approval of Financial Statements: The board presents audited accounts, including income statements, balance sheets, and cash flows, for shareholder approval. For these banks, discussions would center on earnings shortfalls, provisions for bad debts under IFRS 9, and DDEP haircuts affecting bond holdings.
• Declaration of Dividends: If profits allow, dividends are proposed and voted on. Given crises, MNCs might recommend retention for capital buffers, as per BoG’s Capital Requirements Directive, leading to debates on payout ratios.
• Election or Re-election of Directors: Shareholders vote on board composition, emphasizing independence under BoG’s Corporate Governance Directive 2018. In poor performance scenarios, activists might push for changes, akin to governance reforms post-2017 cleanup.
• Appointment of Auditors and Fixing Remuneration: Approval of external auditors (e.g., PwC or Deloitte) and their fees, ensuring compliance with auditing standards and BoG’s oversight.
• Approval of Directors’ Remuneration: Voting on executive pay, including bonuses, which could be contentious if earnings miss expectations, aligning with sustainable banking principles.
• Special Resolutions on Major Issues: Such as share buybacks, capital raises, or amendments to articles. For MNCs, this might include strategies to hedge forex risks under the Payment Systems and Services Act, 2019 (Act 987).
• Shareholder Questions and Discussions: Open forum for queries on performance, risks (e.g., cyber threats under BoG’s Cyber and Information Security Directive 2020), and future outlook, promoting transparency.

In practice, AGMs for these banks have addressed DDEP vulnerabilities, with examples like Stanbic Bank’s 2023 AGM focusing on liquidity management for profitability.