A one-size-fits-all approach to corporate governance for Northern Ireland SMEs (small and medium-sized enterprises) will not work because their needs are vastly different to that of bigger corporations, says a new report from ACCA (the Association of Chartered Certified Accountants).

The report, Governance for all: the implementation challenge for SMEs, establishes that while in larger organisations corporate governance is primarily tasked with ensuring that management acts as shareholders’ agents, for SMEs it is mainly about improving business performance and managing risk.

Brian McGuire, ACCA Ulster Members’ Network, said “SMEs need to realise the potential benefits of implementing corporate governance within their businesses. But equally, governments, advisors and other stakeholders need to realise the challenge for small businesses across Northern Ireland is that established corporate governance frameworks have been developed with large, listed companies primarily in mind. Such frameworks and codes may not reflect the realities of running a small business.

“Governance issues are nevertheless of critical concern to small businesses which account for 99.9% of all businesses in Northern Ireland, where owners may often be its managers as well, or where company ownership may be shared across family members. Sometimes the line between business and personal interest can be blurred. Corporate governance should establish clear roles and responsibilities for each individual and as such is relevant to businesses of all sizes.”

The report details why corporate governance matters for SMEs; how good corporate governance looks for these businesses and how they can benefit from them; the value and impact of boards; the triggers of change and the challenges of introducing corporate governance.

Brian McGuire concludes: “For corporate governance to work in small businesses the framework needs to take into account the diverse needs for them – they are not all run in the same way.

“Advisers and international institutions, such as ACCA, need to also help by campaigning for the cause of why corporate governance matters to SMEs – this is vital for creating a receptive environment and overcoming barriers to action.”

The global body for professional accountants canvassed views from members of its Global Forum for SMEs for the report, which also incorporates discussions held during a seminar held by the Economic and Social Research Council (ESRC).

To read the full report visit http://www.accaglobal.com/gb/en/technical-activities/technical-resources-search/2015/june/governance-for-all.html

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For further information:

Shane Finnegan or Katrina Frazer, Aiken PRTel: 028 9066 3000Email: Shane@aikenpr.com or Katrina@aikenpr.com 

Notes to EditorsThe key findings of the report include:• There should be clear reporting lines and clarity about how decisions are made and risks controlled, and about other matters that need to be brought to the board’s (or committee’s) attention for review or approval.• The framework should promote understanding of roles and responsibilities and limits of each person’s job, as well as show the board the balance of an organisation such as risk and reward.• Any incentives for staff need to be supportive of board strategies.• There needs to be clear communication by board to management and staff about issues such as strategic goals and expected behaviour.• Appropriate internal controls should be established, related to key risks.• Boards need to have good visibility of management actions and decision making, which includes the provision of high quality information on business performance and risk management.

About ACCA

ACCA supports its 178,000 members and 455,000 students in 181 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 92 offices and centres and more than 7,110 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. It believes that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. ACCA’s core values are aligned to the needs of employers in all sectors and it ensures that through its range of qualifications, it prepares accountants for business. ACCA seeks to open up the profession to people of all backgrounds and remove artificial barriers, innovating its qualifications and delivery to meet the diverse needs of trainee professionals and their employers. More information is here: www.accaglobal.com