Corporate Governance Is Not for Small Firms and Organizations. Discuss.
Corporate governance is not for small companies and organizations. Analytically comment with examples.
Introduction
This paper attempts to make an analytical comment, with examples, on the assertion that corporate governance is not for small companies and organizations. This will be done after the definition of terms, “corporate governance”, “company”, and “organization”.
Definition of Terms
“Corporate governance” enshrines the manner in which power is exercised in the management of economic and social resources for sustainable development (Kihumba: 2000). A “company” is a business undertaking whose main purpose is to make profit for the owner(s). An “organization” entails a group of people who come together and carry out activities systematically in order to achieve common goal(s).
Comment
Corporate governance is often thought about in the context of large publicly listed companies such as Barclays Bank. Corporate governance is not quite common in the small business realm. In fact, most companies feel that corporate governance should be executed in large, publicly owned or traded companies. That is not always the case, however, as corporate governance is just as important for privately held, small businesses such as an owner-manager run supermarket in order for it to adhere to good corporate governance policies and practices. As a business grows and stakeholders increase, good corporate governance will become even more important as there are many people with a vested interest in the business.
Good corporate governance ensures that control mechanisms such as reporting structures are in place to run the business with care and diligence. Transparency and accountability should be the order of the day, while management and staff should act ethically at all times. For example, management should ensure that all clients are served with due respect and courtesy.
In a small business, the business owner is often responsible for ensuring that good corporate
Introduction
This paper attempts to make an analytical comment, with examples, on the assertion that corporate governance is not for small companies and organizations. This will be done after the definition of terms, “corporate governance”, “company”, and “organization”.
Definition of Terms
“Corporate governance” enshrines the manner in which power is exercised in the management of economic and social resources for sustainable development (Kihumba: 2000). A “company” is a business undertaking whose main purpose is to make profit for the owner(s). An “organization” entails a group of people who come together and carry out activities systematically in order to achieve common goal(s).
Comment
Corporate governance is often thought about in the context of large publicly listed companies such as Barclays Bank. Corporate governance is not quite common in the small business realm. In fact, most companies feel that corporate governance should be executed in large, publicly owned or traded companies. That is not always the case, however, as corporate governance is just as important for privately held, small businesses such as an owner-manager run supermarket in order for it to adhere to good corporate governance policies and practices. As a business grows and stakeholders increase, good corporate governance will become even more important as there are many people with a vested interest in the business.
Good corporate governance ensures that control mechanisms such as reporting structures are in place to run the business with care and diligence. Transparency and accountability should be the order of the day, while management and staff should act ethically at all times. For example, management should ensure that all clients are served with due respect and courtesy.
In a small business, the business owner is often responsible for ensuring that good corporate