Corporate Governance Norm for SME

Abstract

The last few decades have witnessed several changes in the world economic system: consolidating trend of globalization and liberalization of economies; crumbling barriers to international trade and free movement of capital due to the establishment of World Trade Organization (WTO) and shifts towards market economy in contrast to the control economy or socialist economy. It was believed that market economy will be the ‘mantra’ for all nations, either developing or under developed, to achieve economic salvation. Destiny smiled and brought the belief to its knee and rethinking process started afresh as to what ought to be the new ‘mantra’. Economic downtown indicated further that it is not the big companies, which are only efficient machineries to rotate the economic circle; rather SME’s are the most trusted vehicles that will lead any economy towards salvation.Literature across the globe suggests adoption of sustainable Corporate Governance Norms within the SME sector. On the contrary, there are strong arguments also available against introduction of such norms. In the present study we have considered the feasibility of introduction of corporate governance norms in the sector and attempted to develop, on the basis of the findings, sound and practicable solutions.