Corporate Governance Law
What is Corporate Governance?
Corporate Governance refers to the systems by which a corporation is directed and controlled by its shareholders, directors, and officers. The structure of governance specifies the rights and responsibilities of different participants in the corporation with regard both to one another and outside parties. These laws generally relate to the boards of directors, managers, shareholders, creditors, auditors, regulators, and other stakeholders.
Through the governance system, a corporation sets and pursues its objectives and serves as a mechanism for monitoring the actions, policies and decisions of the various levels of management in the business.
Corporate governance became an issue of renewed public interest after the high-profile collapse of a number of large corporations in 2001-2002, primarily due to accounting fraud. Entities involved included Enron Corporation, MCI Inc (formerly WorldCom) and many others. These scandals and others led to the passage of the Sarbanes-Oxley Act in 2002. Intended to restore public confidence in publicly traded corporations, it had a number of requirements for reporting, transparency, accounting practice, and accountability of those in positions of corporate responsibility.
Corporate governance laws vary widely from state to state. Many choose to form corporations in one jurisdiction over another because of these laws, among others. In some instances, these laws may also have impact upon tax obligations, as well.
Should you have any questions regarding corporate governance, you can review the materials below or contact an attorney to address your particular questions. Lawyers in your area may be found on our Law Firms page.
Corporate Governance Law - US
- ABA - Model Business Corporations Act
The Model Business Corporation Act (MBCA) is a model set of law prepared by the Committee on Corporate Laws of the Section of Business Law of the American Bar Association and is followed by twenty four states.
- Corporate Governance - Definition
Corporate governance is the set of processes, customs, policies, laws, and institutions affecting the way a corporation (or company) is directed, administered or controlled. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed. The principal stakeholders are the shareholders, the board of directors, employees, customers, creditors, suppliers, and the community at large.
- Corporate Practices and Procedures
The corporate governance practices and procedures of each Enterprise shall comply with applicable chartering acts and other Federal law, rules, and regulations, and shall be consistent with the safe and sound operations of the Enterprise.
- Global Principles of Accountability for Corporate Governance
Learn about corporate governance principles pertaining to board independence and leadership, board and executive compensation, audit integrity, corporate responsibility, share-owner rights, emerging market principles and so much more.
- Sarbanes-Oxley Act
The Sarbanes-Oxley Act was signed into law on 30th July 2002, and introduced highly significant legislative changes to financial practice and corporate governance regulation. It introduced stringent new rules with the stated objective: "to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws".
- TARP Standards for Compensation and Corporate Governance
his document contains corrections to an interim final rule that was published in the Federal Register on Monday, June 15, 2009. The rule relates to certain standards for compensation and corporate governance applicable to financial institutions receiving funds under the Troubled Asset Relief Program (TARP).
- TIAA-CREF - Statement Regarding Fund Governance and Practices
As a result of revelations relating to fund industry practices, people are watching investment companies closely. This heightened awareness presents a unique opportunity for our industry to come together to restore the trust of individual investors.
Organizations Related to Corporate Governance Law
- AFL-CIO - Corporate Watch
After tanking our economy, helping to put us in an 11 million job hole and, to top it all off, taking hundreds of billions in taxpayer bailout dollars, the big banks are right back to business as usual: by lobbying against meaningful financial reform. Instead of lending in their communities, they are choking off much-needed credit. And instead of working with Congress to develop good, commonsense regulations to prevent another financial meltdown, they are spending millions lobbying to protect their own narrow interests.
- Business Roundtable
Business Roundtable is an association of chief executive officers of leading U.S. companies with nearly $6 trillion in annual revenues and more than 12 million employees. Member companies comprise nearly a third of the total value of the U.S. stock markets and more than 60 percent of all corporate income taxes paid to the federal government. Annually, they pay $167 billion in dividends to shareholders and the economy.
- Financial Accounting Standards Board (FASB)
Since 1973, the Financial Accounting Standards Board (FASB) has been the designated organization in the private sector for establishing standards of financial accounting that govern the preparation of financial reports by nongovernmental entities. Those standards are officially recognized as authoritative by the Securities and Exchange Commission (SEC) (Financial Reporting Release No. 1, Section 101, and reaffirmed in its April 2003 Policy Statement) and the American Institute of Certified Public Accountants (Rule 203, Rules of Professional Conduct, as amended May 1973 and May 1979).
- Global Corporate Governance Forum
The Global Corporate Governance Forum supports regional and local initiatives to improve corporate governance in middle- and low-income countries in the context of broader national or regional economic reform programs.
- International Chamber of Commerce - Corporate Governance
There are hundreds of codes and standards on corporate governance out there, their very variety reflecting differing legal traditions and national practices. This website aims to guide surfers through the maze . In western Europe, the emphasis is on satisfying society's expectations of governance systems, and especially the interests of employees and other stakeholders. Germany, France, the Netherlands and the Scandinavian countries come under that heading. Other systems stress the primacy of ownership, property rights and maximizing shareholder value. This approach is followed in the United States, Canada and Australia.
- International Corporate Governance Network
The ICGN is a global membership organisation of over 500 leaders in corporate governance based in 50 countries with a mission to raise standards of corporate governance worldwide. We invite you to join the ICGN and share your experiences, knowledge and expertise with fellow decision-makers in corporate governance from around the world.
- National Association of Corporate Directors
Working together through NACD, experienced board members impact the future of corporate governance. NACD's member network connects 10,000 directors with key stakeholders and the government to strengthen board practices and shape public opinion. By participating, you lead the way to strengthening investor confidence in corporate America. You make a difference.
Publications Related to Corporate Governance Law
- Corporate Compliance Insights
Launched in December of 2008 and sponsored by Conselium, Corporate Compliance Insights is a knowledge-sharing forum designed to educate and encourage informed interaction within the corporate compliance community. Corporate Compliance Insights combines featured articles written by some of the most experienced compliance and ethics professionals in the world with regular updates of important news events in the world of governance, risk, and compliance.
- Corporate Directors Forum
Corporate Directors Forum is a nonprofit organization (501C-6) founded in 1991 to promote high standards of professionalism in corporate governance, and we’ve done it with a commitment to our core values and beliefs, and guided by our purpose. At Corporate Directors Forum, we know that being a director is a challenging and important job — and we provide tools to help directors excel in the boardroom.
- Encycogov - Corporate Governance Encyclopedia
Encycogov is an interactive encyclopedia about corporate governance and financial issues. This site is produced by ViamInvest to the benefit of students, academics, investors and others.
The CGAI is a professional association of members certified in corporate governance post graduate studies. It provides members with continuous professional development programmes and other resources to enable them maintain their authority in this continually evolving subject.
- OECD Principles of Corporate Governance
First released in May 1999 and revised in 2004, the OECD Principles are one of the 12 key standards for international financial stability of the Financial Stability Forum (FSF) and form the basis for the corporate governance component of the Report on the Observance of Standards and Codes of the World Bank Group.
- Program on Corporate Governance - Harvard Law School
The Program on Corporate Governance, operating within the John M. Olin Center for Law, Economics, and Business, seeks to facilitate research and scholarship about corporate governance.
- The Internal Auditor's Role in CEO and CFO Certifications
The Securities and Exchange Commission (SEC) proposed new reporting requirements and on June 27, 2002, ordered CEOs and CFOs to personally certify, in writing and under oath, the accuracy of 2001 financial reports. This order applied to 947 companies with revenues of $1.2 billion or more.
Aritcles on HG.org Related to Corporate Governance Law
- Why Just a Handshake Is Not Enough in Business ContractsWhen someone makes a deal in a business, it usually requires the backup of a drafted contract that is signed by all involved parties. This prevents possible conflict in the future, reduces complications and ensures that all persons included in the deal are kept to the terms agreed upon when it was first created.
- Legal Reasons Why a 50/50 Partnership Split Should be AvoidedPartnerships are complicated relationships that often cause conflict without contracts and agreements explaining obligations and responsibilities. When the partner or multiple partners are all equal in the business, any type of dissolution of the association often leads to severe difficulty for everyone involved.
- What to Include in Corporate MinutesWhen a corporation has meetings between members of the management, owners, partners or shareholders, there are often requirements that these conferences have recorded minutes.
- How to Lose Personal Liability Protection in Your BusinessThere are many forms of liability protection available to businesses, but there are numerous actions and activity that may lead to a loss of this safety. It is important to ensure that liability does not affect the company adversely when litigation may and does occur.
- Benefits of Using a C-Corporation FormationThe use of a C corporation is the most common and provides potentially unlimited possible growth with the use of stock and various other means. This may bring in numerous investors that are looking to increase their portfolios, have the ability to exponentially raise profits and assist in perceived value in the company. Shareholder numbers are not limited a C corporation as in other businesses.
- Legal Considerations When Buying a Business: Summary of the M&A ProcessThinking of buying a business? For any arms’ length transaction, it is critical that buyers take certain steps during the purchase process (also referred to as the M&A process) to protect their legal and financial interests. Assuming the buyer has already identified a viable target company to purchase, we summarize here the essential next steps in this M&A process.
- Importance of Annual Meetings for California CorporationsDid you know that failing to address your company’s corporate and legal compliance issues can lead to costly and avoidable consequences?
- Importance of Shareholder AgreementsWhen a company has shareholders, there are often many things that must be accomplished early on rather than waiting until something occurs. This may be documentation, contracts, contractual agreements that have been analyzed by all parties or signed documents for operations or about the duties of shareholders.
- Importance of Written Operating AgreementsBusinesses run well when there is a written operating agreement in place that explains various aspects of the company and how it should be running. This may be through various documents that explicitly detail the obligations of employees, which files pertain to certain standards that must be in place and how much each individual has provided in assets, skills and knowledge to the company.
- Conducting Due Diligence for a Merger or AcquisitionMergers and acquisitions are very important for corporations when conducting business. To ensure that due diligence is accomplished, a lawyer is usually both necessary and vital in ensuring that paperwork, documentation, contracts and numerous other affairs are in order and properly filed.
- All Business and Industry Law Articles
Articles written by attorneys and experts worldwide discussing legal aspects related to Business and Industry including: agency and distributorship, agency law, business and industry, business formation, business law, commercial law, contracts, corporate governance, corporate law, e-commerce, food and beverages law, franchising, industrial and manufacturing, joint ventures, legal economics, marketing law, mergers and acquisitions, offshore services, privatization law, retail, shareholders rights and utilities.