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Corporate governance and performance of UK listed small and medium enterprises

Corporate governance and performance of UK listed small and medium enterprises
Corporate governance and performance of UK listed small and medium enterprises
Purpose
– This paper aims to report the results of an investigation into the effect of corporate governance factors on the performance of listed small and medium-sized enterprises (SMEs), and examines whether this effect differs between the two sizes of business.

Design/methodology/approach
– The paper uses unbalanced panel data regression analysis on a sample of 234 SMEs listed on the Alternative Investment Market, for a 10-year period (2004-2013).

Findings
– The panel data analysis results show that for all SMEs, corporate governance factors – board size, chief executive officer (CEO) age and tenure and directors’ remuneration – are significantly associated with performance of SMEs. The results also suggest that while board size is associated with the performance of both small and medium enterprises, CEO age is significant only for medium firms and directors’ remuneration only for small ones, while CEO tenure and proportion of non-executive directors are not significant for either.

Practical implications
– Overall, the results imply that corporate governance factors affect the performance of listed SMEs. However, this effect differs significantly between small and medium enterprises. The findings have important implications for policymakers who prescribe corporate governance mechanisms for SMEs.

Originality/value
– The paper adds to existing literature on corporate governance of SMEs by establishing a relationship between firm performance and board size, CEO age, CEO tenure, directors’ remuneration and proportion of non-executive directors.
1472-0701
719-733
Afrifa, Godfred Adjappong
ac714aad-7d0a-4a2a-bcfc-d09358b40b47
Tauringana, Venancio
27634458-b041-4bc1-94da-3e031d777e4f
Afrifa, Godfred Adjappong
ac714aad-7d0a-4a2a-bcfc-d09358b40b47
Tauringana, Venancio
27634458-b041-4bc1-94da-3e031d777e4f

Afrifa, Godfred Adjappong and Tauringana, Venancio (2015) Corporate governance and performance of UK listed small and medium enterprises. Corporate Governance: International Journal of Business in Society, 15 (5), 719-733. (doi:10.1108/CG-03-2015-0029).

Record type: Article

Abstract

Purpose
– This paper aims to report the results of an investigation into the effect of corporate governance factors on the performance of listed small and medium-sized enterprises (SMEs), and examines whether this effect differs between the two sizes of business.

Design/methodology/approach
– The paper uses unbalanced panel data regression analysis on a sample of 234 SMEs listed on the Alternative Investment Market, for a 10-year period (2004-2013).

Findings
– The panel data analysis results show that for all SMEs, corporate governance factors – board size, chief executive officer (CEO) age and tenure and directors’ remuneration – are significantly associated with performance of SMEs. The results also suggest that while board size is associated with the performance of both small and medium enterprises, CEO age is significant only for medium firms and directors’ remuneration only for small ones, while CEO tenure and proportion of non-executive directors are not significant for either.

Practical implications
– Overall, the results imply that corporate governance factors affect the performance of listed SMEs. However, this effect differs significantly between small and medium enterprises. The findings have important implications for policymakers who prescribe corporate governance mechanisms for SMEs.

Originality/value
– The paper adds to existing literature on corporate governance of SMEs by establishing a relationship between firm performance and board size, CEO age, CEO tenure, directors’ remuneration and proportion of non-executive directors.

Full text not available from this repository.

More information

Published date: 2015
Organisations: Southampton Business School

Identifiers

Local EPrints ID: 398305
URI: https://eprints.soton.ac.uk/id/eprint/398305
ISSN: 1472-0701
PURE UUID: a67f513b-5355-4db7-be50-98e17d0e33eb
ORCID for Venancio Tauringana: ORCID iD orcid.org/0000-0002-1433-324X

Catalogue record

Date deposited: 21 Jul 2016 10:47
Last modified: 05 Oct 2018 00:32

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