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SME Governance Guidebook (English)

Small and medium enterprises (SMEs) share distinctive challenges that require specific governance practices. This guidebook presents a tailored governance framework with structures, policies, and practices that mitigate the risks and support sustainable growth of business while recognizing the resource constraints typical of SMEs. The objective of this guidebook is to help SME entrepreneurs and their investors develop a highly tailored governance improvement plan to support sustainable growth of their companies. The SME governance methodology in this guidebook represents a governance innovation by tailoring specific recommendations to the evolutionary stages of SME growth: stage one: start-up; stage two: active growth; stage three: organizational development; and stage four: business expansion. This guidebook provides an international perspective - focusing on characteristics that are common to small and midsize businesses in many different countries. Guidebook is structured as follows: chapter one, SME governance: what is it? why is it important? explains what corporate governance is and how it differs for SMEs. Chapter two, SME governance framework defines the stages of growth for SMEs as well as governance-related risks and opportunities associated with each stage. Chapter three, key governance topics and leading practices takes a deep dive into select governance concepts and practices for each of the five governance topics. Appendix, SME governance action planning tool distills the key recommendations of the SME guidebook and presents them in the form of worksheets to help identify high-priority actions appropriate to your SME’s stage of growth.


  • Author

    Ryabota,Vladislava, Volynets,Alexey K., Carrington,Helen, Kravatzky,Axel

  • Document Date


  • Document Type

    Working Paper

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  • Total Volume(s)


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  • Region

    The World Region,

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  • Doc Name

    SME Governance Guidebook

  • Keywords

    cases of conflict of interest; small and medium enterprise; signing authority; access to formal credit; large amount of capital; employee stock ownership plan; Code of Ethics; conflicts of interest; code of conduct; internal audit function; strategic decision making; access to finance; Check and Balances; national accounting standards; sense of ownership; management decision making; internal control system; delegation of authority; internal auditor; performance management system; law and regulation; fair market value; IS Building; segregation of duty; return on investment; effective decision making; independent external auditor; Enterprise Risk Management; corporate governance principle; quality of product; information and communication; Private Sector Growth; impacts on biodiversity; lines of responsibility; sales by wholesalers; flow of money; amount of cash; Country of Incorporation; interests of shareholder; supply chain sustainability; corporate governance code; initial public offering; change product; lack of control; good governance practices; management and administration; family and friends; private equity fund; risk of bureaucracy; corporate governance structure; degree of informality; good corporate governance; state-owned enterprise; pay for performance; command and control; human resource policies; human resource policy; collaborative decision making; venture capital investor; rules of interaction; transfer of ownership; number of siblings; change of ownership; quality of supervision; Rewards and Recognition; source income; source of income; business continuity plan; valuation of share; access to financing; international accounting standards board; means of communication; good governance policy; benefits of transparency; emerging market economy; governance action plan; identification of risks; amounts of expenditure; corporate social responsibility; reliability of information; corporate governance practice; effects of ownership; small business economics; products in research; small business growth; registered trademark; barrier to entry; Global Reporting Initiative; global supply chain; property of ifc; corporate governance system; growth and development; small business owner; source capital; exchange future; exchange for future; sum of money; source of funding; statics and dynamic; organizational life cycle; Cash flow; organizational structure; external investor; external advisers; organizational development; succession planning; financial information; financial statement; independent director; strategic issue; business conduct; shareholder agreement; core functions; financial reporting; job description; shareholder meeting; management board; company policy; operational issues; operational risk; financial account; venture capitalist; management succession; business risk; ethical culture; business relationship; business performance; potential investor; supervisory board; board meeting; ownership structure; improving governance; career path; benefit package; long-term survival; minority shareholder; long-term strategy; management style; financing need; foreign investor; governance framework; business principle; risk assessment; net worth; collaborative approach; business practice; new investor; regulatory requirement; effective work; investor perspective; institutional investor; individual shareholders; reporting fraud; organic growth; effective governance; skill set; empirical evidence; Talent Pools; strategic partner; sustainability reporting; strategic development; external expertise; incentive system; applicable law; good performance; cash management; reasonable assurance; internal structure; core values; certified accountant; technical talent; firm performance; personal relationship; administrative skill; business expansion; sales growth; business structure; Conflict Resolution; annual meetings; unequal treatment; single owner; organizational chart; Employment Policies; employment policy; education need



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Ryabota,Vladislava Volynets,Alexey K. Carrington,Helen Kravatzky,Axel

SME Governance Guidebook (English). Washington, D.C. : World Bank Group.