Expert Meeting on Good Governance for
SMEs
Geneva, 1 April 2004
Statement by Mrs. Brigita
Schmögnerová,
Executive Secretary
Deputy Ministers, Entrepreneurs, Experts,
Professors,
Guests,
Ladies and Gentlemen,
On behalf of the United
Nations Economic Commission for Europe I
would like to welcome you all to this Meeting.
The primary aim of the Expert Meeting on
Good Governance for SMEs is to review the
current governance practices and to analyse
the models of SME-sector governance in advanced
market economies, the new EU Member States
as well as countries in transition. The
Expert Meeting will explore the situation
at the micro-level, how SMEs understand
good governance, what their problems are,
and what governments and non-governmental
organizations can do to help them. The Meeting
will also highlight the elements and importance
of the business ethics aspects as well as
Business and Corporate Social Responsibility.
As I emphasised yesterday
at the opening session of the sixth Forum
on Best Practice in Development of Entrepreneurship
and SMEs in Countries in Transition: The
Romanian and Slovak Experiences, adequate
government policy should be focused on developing
a business friendly environment, but at
the same time targeted policies are needed,
like (1) improving access of the SME sector
to financing (risk capital, micro-lending,
instruments for financing innovation), and
(2) promoting good governance including
social and environmental responsibility.
Governance at country level
is about the importance of institutions,
the interactions between different levels
of government within a country, the interactions
between the public, including non-governmental
organizations. Governance at company level
is about institutions within companies and
interaction between its stakeholders. Among
the major elements of governance policies
are: transparency, accountability and responsibility.
The World Bank researchers defined governance
as “the exercise of authority
through formal and informal traditions and
institutions for the common good”.
UNDP defines governance as “the
exercise of political, economic and administrative
authority to manage a nation’s affairs”.
Evidence suggests that
good governance is an essential component
of sustainable economic growth. In contrast,
poor governance and slow economic development
appear to be mutually reinforcing. It is
increasingly evident that the quality of
governance is a contributory factor to improved
economic performance. Corporate scandals
like Enron, Worldcom, Parmalat and the stock
market crashes have intensified the issue
of Good Corporate Governance. The key areas
addressed included accounting standards
and disclosure, auditing practices, protection
of minority shareholders’ rights,
rules for board of directors, management
responsibility and remuneration. Discussions
intensified immediately after the scandals
and might have decelerated later, but GCG
remains essential for the functioning of
financial markets, economic growth and employment.
Today and tomorrow we are
going to discuss good governance for SMEs
at country level and a few aspects of good
governance at SME level. Good governance
for SMEs includes practices that could encourage
the start-up of SMEs, methods that are useful
for businesses to tackle the challenges
of market. The development of SMEs is critical
to the overall economic and sustainable
growth of market economies. SMEs create
jobs, employ workers laid off from the declining
of restructured enterprises and generate
government revenues.
We will also discuss business
social responsibility. At the enterprise
level the principles of business environmental
and social responsibility are becoming more
relevant. Let me draw your attention to
initiatives like the Global Compact launched
by the United Nations Secretary-General
and the EU Green Book on Corporate Social
Responsibility, which both promote the environmental
and social responsibilities of business.
Social and environmental responsibility
means that enterprises in their profit-oriented
actions take into consideration social and
local/other environmental implications.
This way enterprises can be an integrated
part of the local communities helping them
in the fulfilment of their achievements.
Ladies and Gentlemen, I express my appreciation
to the Governments and the academic society
of the UNECE region for convening this Forum.
I would also like to thank the entrepreneurs
and owners representing different businesses
from hotel management to carpet weaving,
from show manufacturing to human resource
management, from more than thirty countries
for their participation in this Meeting.
I hope that we will have a very fruitful
discussion.
Thank you for your attention.
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