#TheGovernanceGuide – Dumisani F. Ntini | Governance & Strategy Practitioner
Micro, small and medium enterprises (MSMEs) are, without a doubt, the engine of Eswatini’s economic vitality.
Their employment creation is unparallelled. They stimulate innovation, support families, and cushion communities in a plethora of facets. From agribusiness ventures and manufacturing workshops to transport operators and service providers, MSMEs form the backbone of national resilience. Yet one question deserves serious reflection: Are Eswatini’s MSMEs structured to scale sustainably? Growth and maturity are not only about sales, they are founded on systems, oversight and discipline. Herein lies the significance of robust governance.
Very often, the term ‘corporate governance’ is assumed to apply only to large corporations, state-owned enterprises, and non-governmental organisations. In reality, it can be argued that governance simply means how a business is directed, controlled and held accountable. It answers pertinent practical questions. Who makes key decisions? How are finances monitored? How are risks identified and managed? What happens if a key leader exits? For small businesses, these questions are often handled informally. We acknowledge that this informal handling and slack perspective of corporate governance works at startup and development stages. It however becomes risky throughout the business life-cycle progression, particularly at the growth stage.
A small retail business with three employees may operate comfortably through informal arrangements. What happens however, when that organisation expands to twenty employees, or begins supplying regional distributors? Does this loose perspective serve our MSMEs when they seek financing? Surely, complexity increases. Having more employees implies more labour obligations. Higher revenue means greater tax exposure. Larger contracts require stricter compliance requirements. Regional governance frameworks, including the recent King V Code on Corporate Governance, emphasise ethical leadership, prudent control and sustainable value creation. While MSMEs are not expected to adopt large corporate board structures, we can all agree that the principles of accountability and oversight still apply. Consequently, growth without governance increases vulnerability.
Access to capital is one of the greatest challenges facing MSMEs across the region. Banks and development finance institutions assess more than just business ideas. They evaluate risk. A well-governed MSME signals lower risk to these funding entities. More robust governance ensures clear financial statements, vividly documented ownership structures, as well as transparent reporting systems. It also entails rudimentary risk management processes that better serve organisational sustainability. If ownership is unclear, financial records are inconsistent. Furthermore, where internal controls are weak, funders hesitate. Governance consequently becomes a competitive advantage.
Entrepreneurs often see governance as a restriction on control. In reality, it protects them. Where MSMEs lack structure, disputes among partners escalate, family conflicts spill into operations, employees challenge unclear authority and financial irregularities tend to go unnoticed. There is widespread evidence that fundamental governance measures such as written shareholder agreements, defined job roles, dual signatories for significant transactions, and regular management meetings create clarity. Clarity consequently prevents conflict.
Many Eswatini MSMEs are founder-driven. The founder negotiates contracts, manages suppliers and approves payments. This begs the question, what happens if the founder is unavailable? Without succession planning, which robust governance would uphold, client relationships weaken, operational knowledge disappears and financial oversight collapses. Governance ensures continuity beyond the individual. Training successors (without founders holding too firm a grip on the MSME) is pivotal. Furthermore, documenting processes, as well as separating ownership from day-to-day management (reduced micromanagement) are not just two corporate luxuries, but sustainability strategies.
Eswatini operates within a regional economic ecosystem. Trade relationships with neighbouring markets mean MSMEs increasingly interact with businesses that are governed by more formal oversight frameworks. Regional governance evolution, which is reflected in instruments such as King V and standards such as ISO 37000, signals rising expectations around transparency, risk management and accountability. MSMEs that align with governance principles position themselves early on as credible regional partners. Arguably, those MSMEs that remain informal ultimately find opportunities limited.
Scaling governance for growth and maturity does not necessarily require expensive consultants or complex board committees. We are of the staunch view that this process begins with fundamentals. Firstly, formalisation of ownership structures and agreements is crucial. Secondly, the maintenance of clear financial records and separate business accounts is of utmost importance. MSMEs must identify key business risks and document control measures. It is important for them to establish clear decision-making authority. Another pivotal consideration is the need for structured monthly management meetings. These measures are simple but powerful. They facilitate the transformation of businesses from personality-driven to system-driven.
Just as roads and electricity enable commerce, we posit that governance enables sustainable growth. Without it, even profitable businesses remain fragile. With it, businesses attract capital, retain trust and survive leadership transitions. For Eswatini’s MSMEs, governance is not about compliance culture. It is about economic durability.
In conclusion, if we aim to strengthen the MSME sector and expand regional competitiveness, governance must move from being perceived as a large-corporate concept to being embraced as an entrepreneurial discipline. Scaling sales without scaling oversight is risky. Scaling revenue without scaling accountability can be injurious. Scaling operations without scaling governance is unstable. The MSMEs that will lead Eswatini’s next phase of growth will not only be innovative. They will be structured. Structure, when embedded early, becomes strength.
The views expressed are of the author, Dumisani F. Ntini, Governance & Strategy Practitioner and Founder of Global Governance Group, a cross-jurisdictional governance, risk and systems advisory operating across Australia and Southern Africa. Contact: operations@governancegroup.org.