Establish to what extent small and medium enterprises (SMEs) in the Port Elizabeth CBD comply with good governance principles and practices

Throughout the world, corporate or good governance has become such a dominating terminology in the ever -increasing business vocabulary. Its fast rise and strategic relevance to the global business communi ty is part ly due to the desi re by the business leaders wor ldwide to be seen to be doing something about the scourge of corporate failures resulting f rom poor governance. The objective of the research was to establish to what extent Smal l and Medium Enterpr ises (SMEs) comply with good governance principles and practices. The SMEs in the Port Elizabeth CBD were chosen as the representative population of the SME sector throughout the country. The research methodology included: A li terature study to determine, on the one hand the current good governance pract ices global ly, and on the other the role, relevance and the challenges of the SMEs in the South Af rican Economy. An empir ical study in order to obtain the empir ical evidence concerning SME compliance to good governance principles and pract ice. This was done through a survey of SME sector in the Port Elizabeth CBD. Lastly, the conclusion and recommendations. The conclusion was reached, inter alia, that the major ity of SMEs do not comply wi th good governance principles and pract ices for various reasons. Therefore the following recommendations were made: Recommended that the organisational accountants appointed in terms of the law should not confine themselves to the financial aspects of the business only, but also look at governance of these small businesses. Recommended that a sub-code for SMEs be developed. Recommended that the existing code of governance be amended to include a clause that requires large and establish businesses to insist on good governance in the SMEs they deal with at any level. Recommended that the South African Qualifications Authority (SAQA) should develop a qualification or unit standard on good governance to facilitate training on good governance. Since good governance knowledge is a key competence for every manager, especially senior management. It is recommended that institutions of higher learning should have good governance in their curriculum