Sustainable Business Practices and Directors’ Duties: A Critical Examination of The Companies Act 2019, (Act 992).

Abstract

Company directors play a central role in advancing corporate objectives, and company law traditionally imposes duties and liabilities to ensure that directors discharge their responsibilities with propriety. In Ghana, the passage of the Companies Act, 2019 (Act 992) raises the question of whether directors are legally obliged to look beyond creating wealth for shareholders to actually pursue ethical and sustainable business practices. Adopting a doctrinal, library-based methodology and situating the discussion within the contemporary stakeholder theory, this paper examines the extent to which Act 992 modifies existing rules on directors’ duties in promoting ethical and sustainable business practices. The analysis shows that section 190 of Act 992 marks a significant statutory shift from the purely shareholder-centric model of the 1963 Act by expressly requiring directors to consider the long-term consequences of corporate decisions, the impact of operations on the community and the environment, and the company’s reputation for ethical conduct. The paper further demonstrates that this revised framework is reinforced by Ghana’s wider regulatory ecosystem, including environmental clearance requirements, ESG disclosure guidelines, sustainable banking principles, and green bond regulations. The study concludes that Act 992 embeds sustainability and social responsibility into the core of corporate governance in Ghana, thereby extending the meaning of acting in the “best interests of the company.”