New research published by ACCA found few SMEs have working boards and if a business does have a NED, chances are they’re a relative of the founder.
The research concludes that business owners want to be the ones that make the big decisions and that they don’t like the idea of losing control and being constrained by ‘outsiders’ (no surprises there). There’s also a cost issue. Entrepreneurs who admitted non-execs could help didn’t think they could afford them. And then there’s a perception issue. ACCA says boards and NEDs are seen as something for larger companies and don’t add value to SMEs. Paul Moxey, ACCA head of corporate governance and risk management, says something has to be done: “We need to address the reasons entrepreneurs are shying away from using other directors as they can provide a cost-effective way of developing these businesses beyond the often-limited horizons of the founders. “Whether it is the perceived cost of new directors, or a fear of ‘losing control’ that is driving the reluctance of entrepreneurs to employ boards, the end result is that their businesses and ultimately UK plc suffers.” Research author Colin Coulson-Thomas, a professor at the University of Lincoln, finds it all a bit, well, sad. “What was most striking – and sad – about my findings were that virtually no entrepreneurs were able to sum up succinctly what was special about their business or what their vision was,” he says. “Some of them had real potential, which independent advice in the shape of new directors could help them realise, but they could not see it. Many found it hard to believe that anyone outside the company could be genuinely interested in helping the business succeed and grow.” ACCA wants governance issues redefined so they’re more meaningful to the entrepreneur, clearly showing the benefits of having a board. Imagesource
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.