Chamber News
Posted On 3/7/2017
ADCCG organizes a seminar on SMEs Governance

The Abu Dhabi Center for Corporate Governance at the Abu Dhabi Chamber organized a seminar on SME’s Governance at the Chamber’s Tower in Abu Dhabi. The seminar revolved around the relationship between unlisted small and medium enterprises in stock markets with monitoring and supervising authorities and their role in developing the national economy and the added value they receive when applying governance within their companies.
During the seminar, Mr Adel Lutfi, Executive Director of Emirates CoreNiche Consultancy, related the poor governance in SMEs due to Absence of leadership in the form of a ‘board of directors’ coupled with the possibility of lack of experience from the management.
He also related the poor governance in SMEs to a lack of clear distinct responsibilities and delegation of powers, hence the absence of accountability; no future strategic plans for growth and expansion alongside poor attraction to new investors; the non-existence of incentives or plans to retain worthy managers; and not being able to cope with changing market trends.
The lecturer explained the importance of good governance to SMEs, saying that there is a need to create a procedural framework that would add value, build-up sound reputation, ensure long-term sustainability and achieve targets with success.
Lutfi stated that governance is very important for SMEs since it protects the rights of owners, employees, customers, creditors, suppliers, local authorities and the society as a whole; contributes to realizing sustainability; limits the effect of risks and negative exposure to financial crisis; and establishes a transparency environment.
Speaking of the importance of governance to family owned businesses, Lutfi pointed out that studies in the United States, Canada, Europe, Australia, and Latin America suggest that family businesses account for the majority of the private businesses and have a major impact on the growth of the national economies.