ECMLG2014: Boards and private SMEs—beyond "one form fits all"

Wafa Khlif (Toulouse Business School, Barcelona, Spain), led an interesting discussion which examined the diversity of board configurations of SMEs based on their task performance. She commenced by identifying characteristics of SMEs, and used a two-dimensional model based on owner proximity, director proximity and manager proximity. Using the analysis of SME data from 186 French companies, Khlif and her colleagues identified four important tasks of boards (performance oversight, leadership assessment, strategy role, service role) and as many as nine states of boards ranging from legal fiction, through coach and watchdog and up to a full-functioning board (that might behave in a manner not dissimilar to the board of a publicly listed firm).

Khlif's conclusion was that a diversity of board portfolios is a reality in private SMEs, and that SME boards may move 'up' or 'down' what is, in effect, a continuum of states depending on the prevailing context that any given SME board may find itself at any given time. The challenge for SMEs is to identify the state that is most relevant to the current context, and to govern and to lead effectively accordingly. Boards need to correctly and realistically assess themselves, in terms of current state and effectiveness—neither of which is straightforward! I can see many possibilities for an insightful piece of research to emerge from the intersection of Khlif's work with Pearse's work and some direct observations of boards in action.