Much of what has been written on governance is written from a larger, corporate perspective. Helen Carrington and Axel Kravatzky co-authored this paper in 2019 with lead authors Vladislava Ryabota and Alexey Volynets, both from the International Finance Corporation (IFC, part of the World Bank).
The key point of this paper is the introduction of the IFC Governance Methodology for SMEs which is designed to support the evolution of the SMEs through various stages of development. At each stage of development the needs of the organization are different, the risks are different, and therefore a different set of governance approaches are appropriate.
Four stages of SME development or evolution
Governance for SME Sustainability and Growth
The paper lays out the IFC's governance methodology for SMEs. For every stage of SME evolution, there are key governance risks that are addressed across five dimensions:
- Culture and commitment to good governance
- Decision making and strategic oversight
- Risk governance and internal controls
- Disclosure and transparency
The factors are brought together in the SME Governance Matrix.