NewzBackground Governance plays a direct role in whether a small- or medium scale business survives beyond its founder, uses resources efficiently, attracts finance and responds successfully to changes in the market. In Ghana, this issue is particularly important because the business sector is dominated by small enterprises and a large proportion operate informally. The 2024 Integrated Business Establishment Survey covers businesses operating from fixed premises, open spaces and mobile locations, showing the breadth and diversity of Ghana’s enterprise sector.
(Stats Ghana) The World Bank’s 2023 Enterprise Survey for Ghana interviewed 713 formal firms between February 2023 and February 2024. Of these, 52.5% were small firms employing 5 to 19 workers, 37.7% were medium sized firms employing 20 to 99 workers, and only 9.8% were large businesses. (Enterprise Surveys) This distribution makes governance especially relevant because governance problems in small businesses are often different from those found in large corporations.
Small firms may not need elaborate boards or large compliance departments, but they still need clear responsibility, financial controls, reliable information and rules for major decisions. Governance in an SME should therefore not be understood narrowly as having a board of directors. In practical terms, it concerns who controls money, who makes decisions, how those decisions are checked, how employees are supervised, how conflicts are resolved, how the business complies with regulations, how risks are managed and what happens when the owner is absent.
The central argument is that governance contributes to SME sustainability when it reduces excessive dependence on individuals and replaces informal habits with systems that are appropriate to the size of the business. However, governance can also become costly and bureaucratic if structures designed for large corporations are imposed mechanically on very small firms. The issue is therefore not simply whether SMEs have governance structures, but whether those structures solve the actual problems affecting their survival and growth.
FIFTEEN (15) KEY ROLES OF GOVERNANCE IN SME SUSTAINABILITY; Governance Reduces Excessive Dependence On The Owner One of the most common practical governance problems in Ghanaian SMEs is the concentration of ownership, management and control in one person. Background Technology Governance refers to the systems, policies, processes and responsibilities used to ensure that an organisation’s technology is acquired, managed, secured and used in ways that support its strategic objectives. For small and medium-sized enterprises (SMEs) in Ghana, technology governance has become increasingly important because digital technologies now influence accounting, marketing, payments, customer management, production, communication and access to markets.
The importance of this issue is particularly clear in Ghana, where SMEs constitute a major part of the business sector. The World Bank reports that 98% of businesses were micro or small enterprises and about 90% were informal in 2015. It also identifies digital technology as an important potential source of productivity growth and business upgrading.
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