Management and Governance in Dutch SMEs

Small and medium-sized enterprises are important engines to stimulate the economic growth of a country. The survival of these firms is partly dependent on their human capital availability. Using strategic leadership theory, this paper examines the characteristics of the entrepreneur/manager, the top management team and the board of directors in Dutch SMEs. Empirical data identifies the entrepreneurs/managers as the most important decision makers. However, to support their decision-making process in the current competitive business environment, two thirds of the CEOs have created top management teams. CEOs and top management team executives combine their industry and functional knowledge to create the necessary firm know-how. Less than half of the firms have adopted a supervisory board. A reason for this could be the CEO's limited knowledge on the concept of governance. The paper concludes that entrepreneurs/managers of SMEs should be made aware of the strategic knowledge and networking advantages both top-management team and supervisory board members can offer.