Corporate governance: the foundation of durable MIPyMEs

In Mexico, approximately 95% of companies are MIPyMEs (Micro, small and medium enterprises). Many of them die during the first year, precisely because there are no mechanisms that ensure permanence over time. One of these mechanisms consists of good corporate governance practices.

"Many owners of micro, small and medium enterprises believe that corporate governance is complex because they do not know it well."

One of the paradigms that has formed a bad conception of corporate governance: the MIPyMEs perceive it as something complex and expensive because, under its implementation, it is more difficult to understand the economic outcome of the company, because it enjoys more subjectivity. There are formulas that demonstrate that, with the implementation of the principles of corporate governance, many operating costs can be reduced, more assertiveness can be generated in decision-making and more business projects can be completed. You just have to understand it and understand it, because it's such a great range of opportunities, that you can make a suit to suit you.

Many owners of micro, small and medium enterprises believe that corporate governance is complex because they do not know it well. But, if given the opportunity, they would learn that corporate governance is not only for large conglomerates, but also for them, since it offers great benefits: it reduces bureaucratic burdens; makes processes more efficient and transparent; there is more control and accountability; Even the implementation of a good corporate governance scheme could be more complex for a large company, which is listed on the Stock Exchange, than for a MIPyME.

A director who would like to sell his business or buy another company, but does not have a corporate governance system, will face more complexities in the merger or acquisition process because the process will involve more time and negotiation. On the other hand, if the principles of corporate governance are correctly implemented, managers will gain greater certainty concerning what is acquired, enhancing the acquisition or merger process, and the company will have the benefits that the three levels of audit (legal, financial and fiscal) that they require.

The problem is ignorance. Leaders believe that they will lose control in decision-making; However, by incorporating people specialized in their field to the board, it becomes much more proactive, because the discussions will be more fruitful, and because the result of the decisions they adopt will be made with greater assertiveness. This is why both MIPyMEs and large companies must learn to be vigilant, inform themselves and break paradigms by selecting the sources of information and the evolution that the country is having in this segment.