CORPORATE GOVERNANCE Directors of SMEs 85. In accordance with common practice in Ghana, Boards for SMEs are based on the unitary model. The main shareholders usually appoint the SME Boards and members are usually either family, friends or the main shareholder. There is frequent overlapping of the roles of chairperson and chief executive. There are no formal programmes or schemes for the remuneration of directors, but the size of the business, its length of existence and profitability are relevant factors. Most SMEs are ownermanaged, but in case of the need for professional management, the recruitment process tends to favour qualified family members. Disclosure mechanisms 86. Structures and processes are in place to ensure that suitable accounting policies have been consistently applied in the preparation of financial statements. For example, the corporate body's annual financial statements are presented in accordance with the Ghana National Accounting Standards and other accounting standards and principles issued by the Institute of Chartered Accountants of Ghana, and for disclosing any deviations from the said standards. The processes also ensure that the corporate body's annual and interim financial statements are circulated to shareholders and regulators within the time-frames specified by law and regulation. They guarantee that annual and interim financial statements are prepared on a basis that facilitates comparability. Auditor's reports on financial statements are faithfully reproduced to the users of such statements, and a balanced, understandable assessment is given of the financial and operating results of the corporate body in the financial statements. 87. No provision for explicit liability of the Board on the accuracies of financial information is made in the Companies Code. Disclosure of material facts, such as changes in directors or auditors, is sometimes not made in real time to the public, and there is little enforcement of this requirement. Compliance with non-financial disclosures is generally weak. Although requirements for the disclosure of related party transactions are adequate, enforcement and oversight capacities for implementation of the same are weak. External auditors are permitted by the Companies Code to provide other services (e.g. accounting, costing, taxation) that could cause conflict of interests. 111