Beyond the listed company: meaningful, appropriate and relevant governance in SMEs

Small companies, by their very nature are fragile and resource depleted. The time horizon in which small companies operate tends to be compressed and, in many cases, lacks a vision for the future. This leads to a response that is unplanned and often chaotic should a crisis occur, and the consequence of unpreparedness inevitably results in failure and personal losses for the entrepreneur. The role of corporate governance in small companies is very different to that in publicly quoted entities and needs to be meaningful, appropriate and relevant if it is to contribute towards the resilience of the small company. Effective corporate governance, with a measure of complexity that is relevant to the size of the company, would help to deal with both the prevention of crises and in the event of a crisis becoming a reality, to deal with it in a structured way that avoids panic and haphazard response.