Application of corporate governance measures in Indian small and medium enterprises: A way forward

Purpose: The current review article provides a bird’s eye-view on corporate governance measures and its importance for the small and medium enterprises (SMEs) in India. In spite of its huge contribution to economic growth and employment generation, the role played by SMEs is often unrewarded and, in cases, remains unacknowledged. Although corporate governance measures have been introduced before 30 years, that is, after Cadbury report, its 100% compliance among the large-sized corporations in India remains opaque. Hence, the current review work is a first-of-its-kind attempt to provide more insights about this unexplored domain, with regard to Indian SMEs. Indian SMEs have huge potentials that are yet to be untapped and it is possible to leverage the workforce, resources, raw materials and government support through proper channelization. Methodology: The current review follows the exploratory research approach since the studies pertaining to corporate governance in Indian SMEs are negligible. To fulfill this research gap, the study attempts at covering the most important aspects of the domain. Findings: The review highlighted the importance of corporate governance and emphasized the need for its implementation among the Indian SMEs so that it can compete with its international counterparts. The review quoted examples of implementing corporate governance among the SMEs in various developing nations and also provided policy-level recommendations. Implications: Togain sufficient level of trust and confidence upon the SMEs’ financial performance by the investors, the current review suggested the possible measures to be undertaken by the government and the entrepreneurs since the contribution should be collaborative in true spirit. Future empirical studies should be conducted in this domain so as to provide suggestions for the policy-makers, entrepreneurs, investors, and so on. Originality: The current review article is a holistic paper that covered the aspects of corporate governance and detailed about the need for it case of Indian SMEs. Only a handful of studies focused on corporate governance in Indian SMEs so far which lacked to provide the way forward and the need for training, awareness, etc.