At the International Trade Centre, we were gearing up to prepare our main stakeholders – micro, small and medium-sized enterprises (MSMEs) – for the challenges ahead. We did not expect, however, that a major crisis would hit so rapidly, and that it would be so different from anything experienced in this century thus far. Yet when asked about corporate governance, owners of small and medium enterprises (SMEs) often are sceptical of its value add. They either believe that the business is too small or that it is too early in its development to benefit from building out corporate governance systems and processes.

The COVID-19 pandemic is an unprecedented global crisis, affecting human health and economic welfare across the globe. It is first and foremost a health crisis, with governments around the world taking measures to prevent the spread of the virus. Yet the pandemic has also resulted in a planet-wide economic slowdown, affecting trade, investment, growth and employment. The World Trade Organization estimates that world merchandise trade in 2020 could fall sharply, between 13% and 32%. Estimated global losses in GDP growth currently hover around 5 percentage points.

We are all well aware of how COVID-19 has destroyed world economy including that of the UK. This has also significantly impacted Small Business Accountants and taxation as there are many new complexities that have entered the taxation mix. Couple that with the numerous financial schemes launched by the UK Government to save jobs and businesses and you have a scenario wherein your firm will have to keep itself updated with all schemes and their working, if you are to provide advisory services. This is a challenging ask and an answer lies in outsourcing these services or your usual accounting tasks such as corporate tax preparation.

Although the pandemic has affected every corner of the world, the economic earthquake unleashed by COVID-19 does not affect everyone in the same way. With fewer resources to ride out the storm, MSMEs have been particularly vulnerable to the repercussions of the crisis. Small businesses active in trade tend to be more competitive and resilient. Yet many of them have been shaken by serious disruptions in international supply chains. Small companies tend to be vulnerable during an economic crisis, in part because they have fewer resources with which to adapt to a changing context. The ITC COVID-19 Business Impact Survey gathered evidence on how the pandemic affected 4,467 companies in 132 countries.

Since the onset of the crisis, Member States have continuously stepped up efforts to support the economy. A timely, temporary and targeted discretionary fiscal stimulus is being provided in a coordinated manner. Significant public resources are directed to strengthen the healthcare sector and civil protection mechanisms and to support affected workers and economic sectors. To date, the aggregate amount of Member States’ discretionary fiscal measures amounts to 3% of EU GDP, a threefold increase since 16 March, on top of the significant impact of automatic stabilisers.

COVID-19 comes with unique challenges, including the need for Doshi practitioners for business accounting and our clients to shift to meeting virtually, supporting business continuity while ensuring the health and well-being of our people and clients.

Despite the prevalent and unprecedented darkness of the moment, crisis has been known to trigger creativity and readiness to seize new opportunities. The way business leaders manage this chapter is set to make all the difference in the long haul and whilst the choices at hand seem limited, there are still potential strategies which can be applied.

In practice, the most common SME governance challenges involve decision making, strategic oversight, recruitment and retention of qualified management staff, succession, and establishing standardized internal control mechanisms and policies. These challenges stem from the very nature of SMEs, many of them family businesses, accounting for startups which typically experience organic growth, and more often than not, the systems, policies, and processes required for the proper governance of the business lag behind.