Drawing from my treasury oversight roles at major Ghanaian banks like GCB Bank, the Board’s duty under the Corporate Governance Directive 2018 is to approve treasury policies that align with BoG’s Liquidity Risk Management Guidelines and Basel principles. These policies ensure the treasury department manages market, liquidity, and credit risks while supporting bank stability, as evidenced by 2025 challenges from global interest rate hikes affecting cedi liquidity.

Five key areas in a treasury policy, with their criticality:

1. Limits on Exposures and Positions: Set caps on foreign exchange, interest rate, and counterparty exposures. Critical for capital maintenance by preventing losses from volatile markets (e.g., 2025 cedi fluctuations); at Stanbic, FX limits preserved CAR.
2. Liquidity Management Frameworks: Define contingency funding plans and liquidity ratios (e.g., LCR >100% per BoG). Essential for liquidity function, avoiding crises; Ecobank’s policy includes stress tests for withdrawals.
3. Investment Guidelines: Specify eligible assets, durations, and diversification. Vital for income generation via yields, while protecting capital; in 2025, banks like Access diversified post-DDEP.
4. Hedging Strategies and Instruments: Outline use of derivatives for risk mitigation. Crucial for income stability; international practices like Barclays’ hedging aid Ghanaian banks.
5. Interdepartmental Coordination and Reporting: Mandate ALCO oversight and reports. Key for integrated functioning; at Fidelity, this prevents mismatches.

These areas foster effective operations, enhancing resilience.