Corporate governance is the structure of rules, practices and processes that guides the way a company communicates with stakeholders, achieves objectives and measures performance. It also serves as a system of checks and balances that holds corporate leaders accountable. Today’s business environment demands that companies do more than just increase shareholder value through profits. Instead, businesses are expected to make a profit while also demonstrating good corporate citizenship through environmental awareness, ethical behavior and responsible governance practices.
When developed and implemented wisely, corporate governance can be used to showcase the board’s commitment to integrity as well as its obligation to shareholders. Conversely, poor corporate governance policies can cause a breakdown of trust, both internally and in the minds of outsiders. When this happens, it can result in a loss of shareholder confidence that can jeopardize the future of the company. Small to midsize businesses that do not have an in-house legal department are wise to enlist the help of Outside General Counsel™ in developing a solid corporate governance plan.
Information And Experience Are Key To Practical Corporate Governance
Corporate governance influences every aspect of the organization, including the corporate decision-making process on the most important issues facing a company. Such issues include mergers and acquisitions, business litigation, intellectual property matters, regulatory compliance issues and all other general corporate matters. Additional matters include, the principles’ direct the relationship between the board of directors, management and all other stakeholders.
Our attorneys at Santomassimo Davis LLP work with a company’s board of directors to develop, enhance and, in some cases, overhaul the corporation’s governance policies. We combine our extensive corporate experience, legal insight and sound judgment to help business leaders make informed, tactical choices that are aligned with the long-term goals of the company. Below are just a few of the corporate governance matters on which we assist clients:
- We draft and review corporate governance documents, including indemnification agreements, by-laws, corporate governance guidelines, board committee charters and executive compensation plans such as stock options, restricted stock or performance units.
- We will also file documents with applicable state and federal regulatory agencies if necessary.
- We advise corporate constituents on what they can and cannot lawfully do. This is particularly important when major laws evolve and new ones emerge, such as those created by Sarbanes-Oxley.
- Additionally, we will educate members of the board of directors, executives and employees on their respective rights and obligations.
- We ensure compliance with state and federal regulations. This is accomplished by conducting periodic audits and responding proactively to investigations.
- We prepare board and committee agenda and meeting notices, attend meetings and draft minutes.
- We participate in negotiation, structuring and documentation of significant business transactions.
- We advise directors on whether shareholder approval is needed and the appropriate channels for obtaining approval.
Conflict Management And Resolution
In a heavily regulated, litigious world, a corporation’s survival and success depend greatly on how it handles its legal issues. A company’s corporate governance policies should lay the framework for how the organization deals with conflicts of interest between those in leadership and the broader base of corporate constituencies, including shareholders, employees, customers, suppliers and the surrounding community.
Any significant event in the life of a company has the potential to give rise to litigation. Corporate governance cases can arise whenever a board’s decisions are challenged in court by shareholders who question directors and officers and their decision-making process. The manner in which these types of cases proceed depends largely on the issue at hand. At Santomassimo Davis LLP, we always strive to resolve corporate governance issues in the most expedient and economical way possible while keeping in mind the long-term health of the organization.
Outside General Counsel™ Can Assist With All Corporate Governance Matters
To learn more about how we can put our extensive experience and legal knowledge to work for you, contact us online or call 201-254-0777 today to arrange a consultation with one of our skilled corporate lawyers. Our Outside General Counsel™ engagement at Santomassimo Davis LLP can advocate successfully for your business. We serve Parsippany and all of north and central New Jersey.