Exploring corporate governance practices in small and medium enterprises (SME): A case study of John and Penny group of companies, Windhoek

Abstract

This dissertation explored corporate governance practices in small and medium enterprises (SMEs) in Namibia, focusing on John and Penny Group (Pty) Ltd and John Endjala Investment (Pty) Ltd in Windhoek. This study addressed the implementation of corporate governance in SMEs and the challenges they faced in adhering to these practices. This study followed a constructivist research philosophy that emphasised the subjective understanding of participants' experiences. The research employed a qualitative approach, using open-ended questionnaires to gather data from 10 participants, including directors, managers, and low-level employees. Simple random sampling technique was used to choose employees, and selective sampling was applied to decide on qualified participants. This study highlighted that having an available and effective board of directors and transparency and accountability are standard corporate governance practices that best suit private corporations in Namibia. This study revealed that various challenges, including limited resources and skills, poor R&D investment, lack of databases, conflict of interest, lack of mentorship, and a lack of understanding of governance principles, hinder the implementation of corporate governance in SMEs. Despite these challenges, this research identified critical practices that can enhance governance in SMEs, such as establishing board committees, regular board meetings, and adherence to governance codes such as the NamCode. The paper further suggested that, while SMEs face significant barriers to effective corporate governance, tailored strategies and increased awareness can improve governance practices. The study recommended that private corporations in Namibia implements proper auditing procedures to prevent the misappropriation of company funds and resources. Another key recommendation is for companies to recruit experienced and skilled managers who can effectively lead the organisation towards success. This study contributed to understanding corporate governance in SMEs and offers recommendations for policymakers and SME owners to foster better governance. Practically, the study provided actionable recommendations that private corporations can implement to address governance challenges. These recommendations, such as implementing proper auditing procedures and recruiting experienced managers, offer clear steps for improving corporate governance practices.