Article Preview
TopIntroduction
Corporate governance as a concept has increasingly become a trending and debatable issue across the world in recent years. It is within this context that Dwaikat, Qubba, Madbouly, & Queiri (2020) highlighted that corporate governance is progressively receiving much attention from policymakers across the globe as they learn from the negative consequences of the Asian crisis of 1997 and the United States crisis of 2008 as well as widespread poor performance of business entities in Sub-Saharan Africa. This state of affairs justifies the need for sound corporate governance for both small and big companies in developed and developing economies. However, there is an ongoing academic debate about whether to adopt a “one-size-fits-all” corporate governance approach for both small and big companies or not (Abor & Adjasi, 2007).
It is worth mentioning that the adoption of effective corporate governance in the corporate world plays a fundamental role when it comes to the survival, growth and sustainability of business entities especially Small and Medium Enterprises (SMEs). Given this information, it appears that the adoption of sound corporate governance principles can also benefit the nation in terms of economic development and growth. Notably, good corporate governance is of great importance in the sense that it promotes excellent management, high level of transparency, stakeholders' benefit, good reputation and recognition and elimination of wastage and corruption (Sarah, 2017). This information heightens the need for the adoption of international best practices of corporate governance since high-quality corporate governance principles and practices create a conducive environment for business and ensure the survival of companies during bad economic times.
Despite the benefits associated with the effective implementation of international corporate governance principles and practices, it is not encouraging to observe that the extant corporate governance literature is skewed towards large organizations especially multinational companies. Notably, Dwaikat et al., (2020) lamented that much of the corporate governance scholarship has been attributed to big companies especially public listed companies. Moreover, it is surprising to note that SMEs were much neglected in this corporate governance wave (Hove-Sibanda, Sibanda, & Pooe, 2017; Sarah, 2017; Ashe-Edmunds, 2016) despite their economic and social contributions in every country (Dzingirai, 2020; Dzingirai & Baporikar, 2021). This calls for an in-depth understanding of corporate governance in the context of SMEs particularly in the Sub-Saharan African countries that are experiencing economic downturns like Zimbabwe.
Building on the above discussion, it is crucial to mention that SMEs play a fundamental role when it comes to economic growth and development in many countries. In the Malaysian context, SMEs contribute significantly to their economy and social transformation in recent years. Specifically, Mahzana & Yan (2014) documented that Malaysia's SMEs sector is widely accepted as the backbone of the economy provided that a sum of 645 136 SMEs operate in Malaysia which transforms into 97.3% of all registered businesses. This statistic reveals that SMEs appear to be a catalyst when it comes to the economic growth of many developed countries.
In the Indian context, SMEs are regarded as drivers of economic growth. In this regard, SMEs employ 40% of India’s labor force and constitutes approximately 80% of all industries as they produce 8 000 value-added products (Sangvika & Avinash, 2019). This means that SMEs have the potential to accelerate industrial growth in India since its government is promoting the “Make in India” campaign which promotes the creation of new ventures. Going forward, the SMEs in India contributes a lot in relation to Gross Domestic Product (GDP) and exports. For instance, Vashisht, Chaudhary, & Priyanka (2016) documented that Indian SMEs contribute 42% of all exports and registered about 50% of the total industrial output. According to Rathod, Ranpura, & Patel (2016), various SMEs in India employ approximately 18 million people. This suggests that the growth and survival of SMEs are key to the Indian economy despite a multiplicity of challenges confronted by these entities.