Small and medium-sized enterprises (SMEs) are the backbone of the Egyptian economy which allows them to be the main candidates for innovation and be involved in the key factors that comprise a healthy, competitive environment. These are crucial
aspects in order to gain entry into the global marketplace (Elsaid et al., 2014).

Corporate governance (CG) constitutes the basis and principles for good structuring and control of an organisation from the inside out, functioning in the best interest of the shareholders and other stakeholders.

In this study, the researcher refers to corporate governance as the basis for all sorts of transformations needed to improve the organisation, competitiveness, and control regardless the size of a business. Although the term corporate is commonly used for
larger enterprises, in this thesis it is used to expand the meaning to include other aspects that can be adapted and followed by SMEs in order to improve performance and enhance growth. This study also seeks to determine how CG impacts organisation
innovation and performance in the Egyptian SME sector at all stakeholder levels (Elsaid et al., 2014).

The study can be seen as a useful, instrumental tool for SME owners and entrepreneurs to utilise in their businesses to overcome barriers of trade, and successfully run their businesses.

It is evident that SMEs can benefit from CG. Nevertheless, the evidence that governance influences innovative activity is at best weak, and currently lacks the specifications needed to be well-established, particularly in emerging markets as Egypt. The overall aim of this study is to contribute to the efforts made to facilitate the adoption of innovation in SMEs.

The major outcomes of CG in the Egyptian context that are related to innovation are: access to finance, formal structuring and setup, improved knowledge, better ownership structure, internationalisation, agency problems, and thinking and leadership style.

An innovation organisation can be characterised by decision rights and the dimensions of information, motivation, and structure. These dimensions form the minimum requirements for an organisation to be readily equipped and successful for
innovation strategies and implementations. In this research, the proposed model aims to link CG with innovation in the Egyptian SME context.

This study used a positivist, quantitative paradigm with a conclusive outcome. The researcher used deductive hypothesis testing as the logical process, and the Structural Equation Modelling (SEM) technique to test the proposed conceptual model and related hypotheses. The quantitative Structural Equation Modelling (SEM) technique was used to explore all hypothesised causal relationships of the model and needed descriptive statistics [to describe the sample]. Furthermore, the study also
used reliability analysis (Cronbach's alpha), missing value analysis, standardised residuals analysis, model fit testing, convergent validity and discriminant validity, factor analysis [to eliminate redundancies in variables], and finally LISREL software to
apply SEM. A pilot study was conducted prior to the quantitative study to explore the factors of the study and confirm the research questions, hypothesis and conceptual model developed using the literature. Furthermore, a validation study was conducted
after the quantitative study to validate the results of the research with subject matter experts. The researcher targeted a sample size of 200 to test seven constructs for SEM [100 to 200 respondents were sufficient for carrying out the research, depending
on the quality of responses and model fit]. Also, a sample size of 10 experts was used for the pilot and validation studies. A questionnaire (Appendix A), was developed to be self-administered, and was distributed to the selected sample. The questionnaire
extensively used the Likert Scale as a tool to investigate the different constructs of the model.

The outcome of the study is a model that links CG of SMEs with their capability to innovate. The model demonstrates a good model fit and supports the impact of governance on innovation in SMEs, and is suitable in accordance to the current macroeconomic conditions in Egypt. According to the model results, good CG affects the four factors of: enterprise knowledge, business risk management, stakeholder management style, and compliance, and this consequently impacts the innovation of the organisation. To transform to become an innovative company, one must work thoroughly on CG practices. The new model guides the practitioner and policy makers
via variables and all details that would lead to improving the innovativeness of the SMEs in Egypt. The study also suggests that the current landscape of SMEs in Egypt is aware of the importance of each of the introduced variables governing their
innovation alone, but do not take into account the casual impact of each of them on innovation.

The model can be a starting point for an awareness campaign that can be supported by the government for innovation. The model may also be used as a development tool for government to encourage SMEs to formalise and reap benefits of the LE200 billion initiative lead by the Central Bank of Egypt (CBE) to aid in the growth of Egyptian SMEs.