Small to medium private enterprise: aligning shareholder, director and manager interests

Research into the corporate governance practices of small to medium sized private enterprises has been limited, as most of the current literature has focused on larger public corporations. Spectrum Resource Group Inc. (Spectrum) was utilized as the partner company in conducting this research, analysis and recommendations. The research focused on family, private, small to medium sized enterprises and employee owned companies to act as a foundation to analyze and compare to Spectrum's existing structure. This project focuses on the shareholder, director, manager relationships and the associated agency issues and costs. Furthermore, the project focuses on aligning appropriate incentives for different management levels considering both owner-managers and non-owner managers. Lastly, this research results in recommendations about the appropriate size, context and scope of board structures and director alignment. Overall it was found that incentives need to correspond to the type of job that is performed smaller boards have significant advantageous over larger boards, and finally, that the positions of shareholder, director and manager need to be clearly delineated. --P. ii.