This document discusses issues related to small and medium enterprises (SMEs) globally, including governance, succession planning, and challenges they face. It provides examples of SMEs in Latin America (Mexico), Africa, and Asia. Key points addressed are the importance of governance structures, ownership succession, developing talent for leadership succession, and common struggles SMEs face with a lack of planning, skills, and financing.

1. A Debate

2.  Governance
 Succession
 SME’s in Latin America: Mexico
 Case Study: Cineapolis
 SME’s in Africa
 SME’s in Asia
 Conclusion

3. • Structures put in place to discuss and decide
the right issues at the right time by the right
people in the right place.
• A way to integrate ownership, business and
family subsystems while maintaining the
necessary boundaries.

4.  Alternative to sale or closure.
 Ownership succession: the complete and
irreversible transfer of ownership from one
group to another.
 Managerial or leadership succession: ultimate
transfer of management duties and
responsibility from one C.E.O to another

5. FAMILY BUSINESS NON FAMILY BUSINESS
 Owner holds all the cards • Owner holds all the cards
 Poor business • Poor business performance
performance
• No natural or trained
 No natural or trained successors/gender issue
successors /gender issue
• Unwillingness of CEO to let
 Unwillingness of CEO to let go
go
 Conflict within family

6. • Plan, Plan and Plan—a process, not an event
• Reduce lifestyle issues
• Have an organization
• Develop talent—a marathon, not a sprint
• Strategic planning to determine needs of
business going forward
• Implement appropriate governance

7.  5,144,059 companies
 99.8% are SME’s
Sales
 52% of GDP
 72% of Employment
 Regulated by SPyME
 Life period: 3-5 years
Services Comercial
Manufacturing Others

8. SOCIEDAD
ANONIMA
Limited
Liability
Fixed or variable Fixed or variable
capital capital
-Shareholder’s Shareholder’s
liability liability is limited
to their stock
-Directors liability interest
A disinterested
No third party
third party
Sucession must be
Minority rights stablished sin ce
the beggining
Accounting
methods
Sucession and
merger

9.  Absence of planning and forward thinking
 Inadequate leadership and management
skills
 Lack of future business plans and problems
with cash flows
 Inability to innovate
 Inadequate access to technical assistance

10.  Mexican
 Founded in 1947
Cine Cine “La
Cinepolis
Morelos raza”
 Small company
 Family business

11. CHAIRMAN
Father OF THE
BOARD
Sons Director Director
PROBLEM :
family matters have repercussion on the business

12. Son CEO
Family
members Director Director

13.  Biggest cineplex chain in Mexico with 205
theaters in 65 cities
 Largest chain in Latin America
 230 theaters
 2,160 screens
 13,000 employees throughout
Mexico, Guatemala, El Salvador, Costa
Rica, Panama, Colombia, Brazil, Peru and
India.

14.  North Africa, Mauritius, and South Africa
 South Africa: 55% of all jobs, 22% of GDP
 Nigeria: 95% of all formal manufacturing activity
 Senegal and Kenya: conducive for SME’s as well
 Incentives are being given by Institutions
 African Development Bank, UK Commission for
Africa, International Finance Corporation, UN

15.  Political and economic  Poor access to formal
instability financing
 Informality  Management
 Limitations brought  Infrastructure
about by the market  Unavailability of
 Lack of regulations and certain raw materials
policies  NO SUCCESSION
 Undeveloped regional PLANS
integration

16. More Initiatives
Communication
More rigid policies
More diverse sources of financing
Succession Plan

17.  China is regarded as having the most
competitive SMEs.
 Followed by North Asian markets
 Japan, Hongkong, Korea and Singapore
 Private-owned enterprises have chosen the
highly centralized family style to be their
ownership capital structure.

18.  Change in ownership is a dynamic
evolution, which, however, is restrained by
external institutional environment to appear
to be ultra-stable. The changes in the
corporate governance system are often more
slow than necessary and, in some cases, are
not even made at all. This mismatch, even if
transitory, could stop the growth of family
firms

19.  Combining the modern market rules and the
traditional Chinese culture.
 Admission of the difference in knowledge and
capability among people.
 Ownership and property rights should be
unambiguous
 Improvement of internal management and
training of talents to increase competitiveness.
 Rely NOT on the network-based but the rule-
based development.

20.  There is a growing need for greater
transparency and corporate governance
among SME’s.
 SME’s are facing the same problems all over
the world.
 SME’s aren’t the only ones experiencing
problems in corporate governance and
succession.
 Apple and Steve Jobs