Corporate Governance for SMEs

SME Success Series – September 2013

Rami Raslan - GradICSASenior Corporate Secretary

Corporate Governance – What is it?

Law

04/09/2013 2

Code

So how do we apply good governance?

Conclusion … ?

Corporate Governance is a mindset

Want to …Vs.

Have to …

Don’t break it …

Yes,

you

can

fix it

if its

brok

en, b

ut yo

u’ll a

lway

s see

the

crac

ks in

the

refle

ction

Yes, you can fix it if its broken, but you’ll always see the

cracks in the reflection

What needs to be done Preparation should be done by management, in most cases by the owners

of the business. Company objectives need to be established Management structure and process to be identified. Processes for establishing pay and other benefits to employees to be

developed. Develop process to handle potential risks. Identifying key areas of compliance. Regularizing financial audits and disclosure of audit findings. Gain knowledge of corporate governance (its not an expense, its an

investment). Formalize business practices formalized (analyzed and documented). clear roles and responsibilities should be communicated to all staff. Set up an advisory board continuous assessment , ensure integrity of

financial data and holding management accountable.

Facts Carl Bates, CEO of Sirdar SA, an organisation that helps small businesses to

grow says "Sustaining a small business is about separating the roles of shareholder, director and manager. Yet 99% of business owners say ‘I’m the owner, therefore I’m the director.’ Investors would not accept that. Small businesses will struggle unless they truly understand the roles of shareholder and director. Unless you understand this, you will lose the game.“

Bloemfontein Chamber of Commerce chairwoman Wilma Richter says “smaller businesses are running much faster than the bigger guys”.

H.E. Sami Dhaen Al Qamzi Director General, Department of Economic Development - Dubai says “The small and medium enterprises (SMEs) sector of Dubai comprises 95% of the businesses, 42% of the workforce and contributes to 40% of value add to the Dubai Economy. Dubai’s reputation as a well-diversified economy also owes largely to the SME sector. One critical enabling factor for SME development is corporate governance. Indeed, practicing good governance will help SMEs establish robust business processes and prepare them for future expansion. In short, corporate governance lays the foundation for SMEs to be more accountable and transparent in their operations, thus enabling them to be more bankable and investable”

Thank you!