Dubai SME, an agency of the Department of Economic Development (DED), has joined hands with Hawkamah – the Regional Institute for Corporate Governance – to develop a code for SMEs on corporate governance.

The first-ever code with key principles and practices will be launched at a conference for corporate governance for SMEs to be held on September 26 in Dubai.  It will serve as a guide for SMEs in various stages of growth to embrace best practices in corporate governance.

The aim is to create awareness amongst SMEs on the importance of adopting a basic level of corporate governance that will make them more robust, better manage risks, be more bankable and investable.  It is also hoped that the promotion of corporate governance will make SMEs realise that corporate governance is not just something good to follow but is a must-have to grow and progress sustainably. 

Under Dubai SME’s Corporate Governance Plan for SMEs, a two-fold strategy comprising promotion and awareness creation in the first phase and capability development in the second phase has been adopted to enable change and development for SMEs. 

Under promotion and awareness creation, Dubai SME will work with key stakeholders to promote corporate governance to the general SME population. A key tool is a guide book on CG for SMEs which will cater to micro, small and medium sized SMEs.

Under capability development, Dubai SME will work with partners to launch diagnostic tool kits   and training sessions.  It has tied up with the International Accounting Standards Board (IASB) for a train-the-trainer progamme on International Financial Reporting Standards (IFRS) for SMEs.

Abdul Baset Al Janahi, chief executive officer of Dubai SME, said: “Corporate governance is integral for enterprise growth and development.  It opens new doors for SMEs that embrace it willingly. Good governance lays the foundation for a quality SME that focuses on building long-term sustainability.  It will ensure that the SME is bankable and investable to all key stakeholders such as the banking and finance community, private equity firms, and corporate financiers.”

He added “Without proper governance practices, companies will be unable to function optimally, especially in this new world order. Our strategic partnership with Hawkamah – the Institute for Corporate Governance - to develop the first- ever Corporate Governance for SMEs is commendable.  Hawkamah will provide its expertise and knowledge to ensure that the code is practical and effective for SMEs as they seek knowledge and best practices to institute corporate governance in their firms.”

“Good corporate governance practices amongst various enterprises, including SMEs, have added value to the quality of operations and management, increased access to financing, lowered cost of capital, and ensured sustainability of the enterprise,” said Dr Nasser Saidi, executive director, Hawkamah Institute for Corporate Governance.  - TradeArabia News Service