An exploratory study on corporate governance practices in small and micro fast moving consumer goods enterprises in the Cape Metropole, Western Cape, South Africa

Abstract

Small, medium and micro enterprises (SMMEs) play a crucial role in the growth and development of a country’s economy. With this in mind, the small business sector is seen as an important force to generate employment and more equitable income distribution. SMMEs strive towards sustainability and growth, however a substantial number of SMMEs fail due to, amongst other, the lack of corporate governance compliance. One of the major factors that may hinder the implementation of corporate governance practices in SMMEs is insufficient access to SMME funding and lack of skills and information. The main outcome of this study is to provide insight into governance practices of small and micro enterprises in the fast moving consumer goods sector. The descriptive quantitative research design was used in this study. In this research, an exploratory design was used to help develop areas for future research. Furthermore, this study can be regarded as a statistical study and are classified as basic research with the intention of increasing our understanding of corporate governance influence on small and micro enterprises without seeking to solve or treat problems. The units of analyses for this research study were fast moving consumer goods small and micro enterprises operating in the Cape Metropole, while the target population comprised of the owners and/or managers of these enterprises. Judgemental sampling technique was used to select the sample of 36 small and micro enterprises. The data collection consisted of questionnaires, done within the ambit of a survey, which were completed by owners/managers of small and micro enterprises. Key words: Small and micro enterprises, sustainability, growth, corporate governance.