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ACCA publishes report on the role of corporate governance in SMEs

  • ACCA (UK Association of Chartered Certified Accountants) (lt green) Image

30 Jun 2015

The Association of Chartered Certified Accountants (ACCA) has published a report on the role of corporate governance in SMEs. The report details why corporate governance matters for SMEs, how good corporate governance looks for these businesses and how they can benefit from good corporate governance, the value and impact of boards, the triggers of change and the challenges of introducing corporate governance.

The report Governance for all: the implementation challenge for SMEs argues that “a one-size fits all approach to corporate governance for SMEs will not work”.  It suggests that established corporate governance frameworks have been developed with large, listed companies in mind and these may not suit the individual characteristics of SMEs.  The report argues that although corporate governance matters to all companies, the “aims and nature of the corporate governance framework applied are likely to vary from one company to another”.  The ACCA comments that “for corporate governance to work in small businesses the framework needs to take into account the diverse needs for them – they are not all run in the same way”. 

The report identifies a range of benefits of establishing a good corporate governance framework for SMEs including enhanced access to credit and greater resilience to fraud, theft or other financial costs due to poor controls.  However it also identifies a number of challenges to introducing better corporate governance in SMEs including a lack of understand of what changes are needed and also cost considerations.   

The report concludes; “there are many challenges to understanding the role that corporate governance can play in helping SMEs to grow.  More research needs to be undertaken to understand the impact of corporate governance on SMEs and the various barriers that stand in the way of greater implementation of effective corporate governance”. 

The press release and full report are available on the ACCA website.

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