What is a hostile takeover and what effect does it have upon corporate governance? A hostile takeover is where a third-party acquirer seeks to purchase a controlling number of outstanding shares without the endorsement or approval of the target companys board of...

Buying Off Acquirer Often the corporation will attempt to provide benefits to the acquirer that will incentivize it to give up its efforts. These efforts are generally not in the best interest of existing shareholders and can lead to litigation. Target Share...

Anti-takeover Measures in Corporate Governance When an acquirer attempts a hostile takeover, boards of directors commonly institute measures to thwart the acquirers attempts to gain control of the corporation. Some common measures employed are as follows: Shark...

What is the Foreign Corrupt Practices Act (FCPA) and how does it affect corporate governance? The Foreign Corrupt Practices Act (FCPA) places limitations on the ability of the corporation to pay incentives or bribes to foreign governments and corporate officials to...

What industry organizations place standards on corporate governance? Public securities exchanges have extensive governance requirements for companies listing securities for sale with the exchange. Perhaps the most known US exchanges are the New York Stock Exchange...

How does shareholder access to information give rise to issues in corporate governance? Shareholders own the corporation and control the election of directors. While this structure should effectively check the decision making and actions of directors, the lack of...

What is the role of ethics within corporate governance? Corporate codes of ethics are internal measures aimed at ensuring fair and honest conduct by members of the corporation. The corporate law objective to promote openness of information is echoed in codes of...

What is the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank)? Dodd-Frank was passed in response to the financial downturn beginning in 2007. While Dodd-Frank imposed extensive controls on banks and other lending institutions, it also prescribed...

What are proxy advisory firms and what is their effect on corporate governance? Recent changes to corporate governance laws allow shareholders the ability to add information to corporate proxies. As a result, proxy advisory firms have assumed an important role in the...

What is the role of securities laws in corporate governance? Federal securities laws are generally concerned with corporate compliance. The primary federal securities laws are the Securities Act of 1933 (33 Act) and the Securities Act of 1934 (34 Act). State law also...