Privately-owned companies are the most significant drivers of the Canadian economy, contributing up to 67% to GDP, according to the Business Development Bank of Canada. 80% of all companies are also family-owned, according to a 2019 report by the Family Enterprise Xchange and the Conference Board of Canada.
Yet most insights on effective corporate governance derives from research conducted on large public issuers with copious disclosure. Consequently, we know very little about what governance looks like for private companies, both family and non-family.
"Every decision can profit from the injection of an outside perspective."
Our recent report The Critical Importance of Effective Private Company Governance authored by the David and Sharon Johnston Centre for Governance (Johnston Centre), using data from KPMG, showed that the governance models adopted by private companies were as diverse as the companies themselves. We argued, all companies make decisions, with or without formal governance structures. Although there may not be a 'one-size-fits-all' structure or set of policies that works best for all companies, every decision can nevertheless profit from the injection of an outside perspective.
So what does 'good governance' look like for private companies?
For the current study, we took a much deeper dive to expand upon this research. KPMG partners interviewed private company clients from across Canada to capture their insights, anxieties, and strategies around decision making, governance and more. The companies varied in age, size and ownership structures, and represented a broad spectrum of industries, with the vast majority (76%) being family-owned.
We concluded our previous study with a series of important questions that would direct our ongoing research on private company governance. In this report, our findings have begun to address two of these questions:
What is the point of good governance?
What is the potential value of including outsiders in decision making?
Download the full report to take a closer look at the different approaches to effective governance and decision making of the private companies surveyed from across Canada. If you would like to talk to our professionals about the findings raised in the report, we welcome the opportunity to discuss how your business can gain from these insights.
When you are ready to get started, so are we.
Let's do this.