TORONTO, June 18 (AScribe Newswire) -- A new study says that the governance practices of small and medium sized enterprises (SMEs) in Canada lag five years behind their larger counterparts. The study was produced by the Clarkson Centre for Business Ethics and Board Effectiveness at the University of Toronto's Rotman School of Management. In response to the increasing importance of SMEs in the Canadian economy, the Rotman School, in partnership with the Institute of Corporate Directors, has developed a new three-day SME Board Effectiveness Program for current and aspiring directors.
For the study, the Clarkson Centre used their Board Shareholder Confidence Index (BSCI) rating system, which usually measures the adoption of best governance practices by large public Canadian firms, and applied it to a randomly selected sample of 100 public firms with market capitalization of less than $400 million. This study's most notable finding was that the rate of adoption of best practices in the SME sample mapped very closely onto that of the TSX Index in 2002, demonstrating that adoption of best governance practices by SMEs lags five years behind their larger counterparts.
"There is a tremendous amount of information and support available for large firms but directors of SMEs don't have access to the same benchmarks or advice," says Tim Rowley, a Rotman Professor and Director of Board Effectiveness at the Clarkson Centre. "We're starting to fill that gap by supporting directors who want effective governance in small firms by offering research, monitoring and training opportunities."
With the understanding that the BSCI methodology was designed with large cap firms in mind, the Clarkson Centre has since developed a new set of governance rating criteria specific to SMEs. These criteria were selected and weighted after consultation with SME directors and executives, as well as investors. The Clarkson Centre will use this new rating system in upcoming years to develop a SME governance database.
In addition to the Clarkson Centre's research and development of SMEs governance criteria, the Rotman School, in partnership with the Institute of Corporate Directors, has developed a new three-day SME Board Effectiveness Program. The program is designed to teach new and experienced board members how to add value through their fiduciary role. Participants learn how to: tackle the unique challenges in governing a SME, manage the trade-offs among stakeholders, add value to corporate strategy, enhance collaborative group decision-making skills and confront difficult issues that arise between directors and management.
"The collective experience and participation from all participants during the inaugural program was excellent," says Jon Grant, Executive-in-Resident for the SME program and Chairman of CCL Industries Inc. "This is an essential overview for SME board members and advisors that will enhance their performance resulting in more effective boards."
The program was offered this week in Toronto and again from November 23 to 25 at the Rotman School in downtown Toronto. Further details, including registration are available at:
http://ep.rotman.utoronto.ca/open/icd_corporate_governance/smeboardeffectiveness.asp
About the Institute of Corporate Directors:
The Institute of Corporate Directors (ICD), a not-for-profit organization representing the profession of Directors, is dedicated to enhancing the quality of corporate governance in Canada by ensuring Directors remain current on best practices and are well prepared to deal with complex governance issues. Our 3,000 ICD members enjoy a variety of services including a growing curriculum of exceptional formal Director education programs jointly developed with the Rotman School; accreditation leading to the Institute-Certified Director (ICD.D) designation recognized nationally and internationally; informal Director education and networking opportunities offered through any of our nine provincial ICD Chapters; and support services to boards, Directors, aspiring Directors and organizations.
Better Directors. Better Boards. Better Business.
About the Rotman School of Management:
The Rotman School of Management at the University of Toronto is redesigning business education for the 21st century with a curriculum based on Integrative Thinking. Located in the world's most diverse city, the Rotman School fosters a new way to think that enables the design of creative business solutions. The School is currently raising $200 million to ensure Canada has the world-class business school it deserves. For more information, visit http://www.rotman.utoronto.ca.
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CONTACT: Ken McGuffin Manager, Media Relations, Rotman School of Management, University of Toronto, 416-946-3818, mcguffin@rotman.utoronto.ca
Media Contact: See above.
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