The issues of corporate governance in knowledge intensive entrepreneurial firms

Abstract

This paper looks at the issues of corporate governance in knowledge-intensive firms. It provides a conceptual understanding of major challenges faced by governance bodies of such firms in early stages of their development. The major question it asks is about a sustainable model of governance in knowledge-intensive firms. Traditional governance mechanisms of corporate control are neither appropriate nor effective means of protecting the company's interest. They can hardly enable the transition of individuals' intellectual capacity into organisational learning capacity. In firms where human capital plays a major role in gaining the company's competitive advantage, the board of directors has a difficult task in finding sustainable ways of controlling and retaining the sources of knowledge generation.