Corporate governance can be effective at smaller business


Scenario:

According to Chau (2011), the directors of an organization as stakeholders, have the responsibility to monitor the ethical culture of an organization. In addition, Conger, Lawler, and Finegold (2001) identify their responsibilities in seven key areas: Giving strategic direction and advice; overseeing strategy implementation and performance; developing and evaluating the CEO; developing human capital; monitoring the legal and ethical performance of the corporation; preventing and managing crises; and procuring resources. It would seem by these responsibilities that a board would need to be fairly active to be effective. However, in the case of many smaller businesses a board of directors takes a step backward from involvement.

Please explain do you think corporate governance can be effective at the smaller business level? Explain.

References:

Chau, S. (2011). An anatomy of corporate governance. IUP Journal of Corporate Governance, 10(1), 7-21.

Conger, J. A., Lawler, E. E., Finegold, D. L. (2001). Corporate boards: New strategies for adding value at the top. Jossey-Bass.

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