Leader, Manager, you regularly exercise Governance acts, results of your organizational practice and your strategic vision. Also, through some extracts taken from this brochure designed by the Center Patronal, FER Genève, HEIG-VD and HEG-GE, we wanted to enrich your daily life as a manager of a set of human and material forces at company service.

Corporate governance: What challenges for SMEs?

Florent Ledentu
Nathalie Brender translate by Jabandbrain.

Corporate governance can be defined as the system by which a business is directed, managed and controlled. It deals with the roles, responsibilities, rights and obligations of corporate bodies and their mutual relations. In particular, it ensures a balance between powers, defines the decision-making processes for the implementation of the strategy while developing an informed approach to risks and measuring results.

Wrongly, and especially in the flexible and responsive world of SMEs, corporate governance is often understood as a set of guidelines and administrative regulations with little added value. However, good governance, anchored in daily practice, establishes a climate of trust in the company and guarantees management oriented towards sustainable performance.

Good corporate governance is presented as a flexible, efficient, ethical, responsible and transparent management method through which the company interacts harmoniously with its environment.

There is no universal definition of good governance. Each decision-maker must forge his own. Note that the terms governance and corporate governance are equivalent.

The principles relating to good governance have always aimed at a better implementation of the entrepreneurial strategy, which should make it possible to ensure the sustainability of the company through quality management and an increase in the confidence placed in it by all parties. stakeholders (customers, suppliers, company owners and employees, investors, etc.).

Today, it is also important for SMEs, even if they are not incorporated or listed on the stock exchange, to invest in improving their governance. On the one hand, they will benefit from the stability that results from good day-to-day management and development and, on the other hand, it will demonstrate their professionalism and sense of responsibility.

The importance of the human factor in creating, owning capital and managing a business is at the heart of SMEs and is a key aspect for their development and sustainability.

SMEs are very often the result of a family project, friendly or following a professional meeting. Many of them are created in the form of limited liability companies (Sàrl) or public limited companies (SA) in which the founders and their relatives hold the majority of the capital, are directors and frequently manage the company. For these reasons, SMEs need a mode of governance that is simple, flexible and in line with their corporate culture. Depending on its size, legal form, sector of activity, capital structure and organization, each SME can adapt the practices of listed companies or be inspired by other more participatory governance models. and democratic, such as the cooperative.