Corporate governance in construction companies: shortcomings and prospects for development

The construction sector has some characteristics that distinguish it from other industrial sectors. These include the physical nature of the products, the structure of the industry and the characteristics of the organization of the construction process. As a result, governance systems in this sector are different from those in other industries. Until recently, the prevailing view was that corporate governance was not necessary in the construction industry. However, with the increasing pressure for innovation to create new products and processes in order to respond quickly to changing market demands, the creation of a new style of decision-making combined with corporate governance is emerging as a matter of great urgency. In this context, this paper examines possible governance improvement measures in both large and small organizations in the construction industry. The aim of the study is to analyze the governance characteristics between large and small organizations in the construction sector and to formulate recommendations on the direction in which sector stakeholders should evolve in order to maintain international competitiveness. The study concludes that a social responsibility committee should be established under the board of directors to coordinate the interests of all stakeholders. This body should consider the role of corporate governance, thus bridging the gap between what the organization states in its mission statement (goals and intentions) and how it is perceived by society. In this way, SMEs will be able to strike a balance between the need to deliver strategic innovation, management accountability to shareholders and financial management.