Effective Corporate Governance in SMEs

Duration: 3 Days

Overview

Outline

Statistics show that over 70% of businesses across the world are SMEs, demonstrating that this business model is the essence of local societies and regional economies. As such, they play a vital role in economic development – not only through their business contributions but also by creating an investment environment that is open, safe, secure and transparent.

 

As the firms expand, the relationship between owners, managers and employees becomes more complex. A good corporate governance system puts the right policies in place to manage this complexity. Corporate governance creates a solid organizational structure that clarifies roles, reporting lines and delegation of responsibility.

 

This workshop not only considers the latest international and local developments in corporate governance, but is also underpinned by relevant, practical examples and interactive case studies to illustrate both good and bad governance SMEs.

Background to Corporate Governance

  • The origin and evolution of corporate governance

  • Current trends and regulatory developments

  • Comparison of practices across the world

  • State of corporate governance in the middle east

  • Cultural and regional factors

Specific challenges faced by Family-owned companies

  • Types of  challenges

  • The grey line between ownership and management

  • The existence of the additional layer of complexity that the owning/controlling family brings to the business

  • How protocols and management authority structures are often by-passed

  • Why family-owned companies need strong corporate governance

Understanding the need for an Internal Code of Practice

  • Defining and adopting the code of practice

  • Sponsorship, support and observance from senior management (including family members)

  • Ensuring ‘fitness for purpose’

  • Evolving the code based on regulatory, cultural, economic and social changes

  • Awareness campaign and communication of policy

Responsibilities of the Board of Directors and the Management

  • Difference between Shareholder/Owner and Management Roles

  • Appreciating the concept of objective responsibility

  • Understanding the stewardship function

  • Showing leadership and example

  • Composition of the board

Nature of Accountability

  • Performing a balanced assessment of the company’s position and prospects

  • Financial and business accountability

  • Setting up clear lines of accountability

Disclosure and Transparency

  • Financial disclosure

  • Regulatory disclosure

  • Concept of ‘Comply or Explain’

  • Openness of dealings with staff and external counterparties

  • Transparency challenges faced by Family-owned companies

Probity and Ethical Behaviour

  • Encouraging respect and clarity of purpose

  • Defining ethical behaviour and the dangers of misuse in family-owned companies

  • Promoting business ethics and honesty

  • Setting out whistleblowing guidelines

Risk Management & Internal Controls specific to family-owned companies

  • Evaluating and evolving the controls and ensuring arms-length use of authority

  • Setting up and maintaining risk management procedures

  • Compliance, Financial, Operational and Strategic risks