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Corporate governance in small and medium enterprises : a review

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employee explaining the presentation to colleagues

Purpose

Research signifies that well-governed companies exhibit long-run financial results and sustainable growth. In the context of SMEs, this paper aims to review the literature on corporate governance, the implementation challenges of corporate governance and its relationship with performance. Entwined with Indian scenarios, the study can be generalized to other emerging economies, with geographic considerations.

Design/methodology/approach

Studies from 1990 to 2020 are included in the literature review. Three databases were used for the extraction of relevant research articles: Scopus, EBSCO and ScienceDirect. To identify the relevant work, keywords along with Boolean operators for literature search were used from the research databases. The selected articles were further refined based on the authors’ keywords, journal type, data analysis methodologies and abstract analysis. Finally, 115 articles were selected and categorized into themes based on inclusion criteria for further study.

Findings

Corporate governance provides tangible and intangible benefits to SMEs. The study emphasizes on designing a cost-effective discrete governance mechanism for SMEs than the prevailing corporate governance code for large firms. Furthermore, implementing the corporate governance structure with a great level of discipline and stability is equally essential and related to performance.

Originality/value

Listing of SMEs is a relatively new phenomenon in emerging economies, including India. With listing, corporate governance and financial performance are expected to shift. The inclusion of the changing landscape of SME governance makes this study unique and relevant in the current scenario. The study will benefit the policymakers and firms to adopt optimum governance practices and link it optimally with performance.

Link for accessing the full article: https://doi.org/10.1108/CG-10-2020-0470

Authors : Singh, K., & Pillai, D

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