What is the role of state law in corporate governance? State corporate law is the primary law governing corporate governance and operations. Each state passes its own statutory corporate laws and develops its own common law surrounding those statutes. Shareholders...

What state and federal laws primarily contribute to corporate governance? Regulation of corporate governance practices is a mixture of state and federal law and organizational requirements. Below is a list of the primary state and federal laws and stock exchange rules...

What is the role managers (Executives) in the corporation? Managers control the daily operations of the corporation. The senior managers are the officers of the corporation. The most senior positions are often directly chosen by the board of directors. The board then...

What is the business judgment rule? The business judgment rule is a principle that applies to officers and directors acting within the scope of their positions. Directors of a corporation have a fiduciary duty to act in the best interest of their stockholders. This...

What other protections exist for directors acting in their official capacity? Directors (and officers) of corporations often have a layer of protection from personal liability beyond the business judgment rule. Many corporations purchase director and officer insurance...

What is the role of directors of the corporation? Corporate governance procedures under state law and the Revised Model Business Corporation Act regulate the actions of boards of directors. The Organization for Economic Cooperation and Development, Principles of...

Who are the members of a corporation? The corporation is made up of shareholders, directors, officers, and employees. Shareholders are the owners of the corporation. Directors undertake the high-level management and decision-making for the corporation. Officers (and...

What is the composition of the board of directors? The size of the board and the process for electing directors are laid out in either the articles of incorporation or the bylaws. There are generally few requirements in these governing documents with regard to who can...

What is shareholder activism and what is the significance of institutions as shareholders? Shareholder activism refers to the situation where large shareholders of a company exert influence or control over the actions of the directors or officers of the corporation....

What is the process for shareholders bringing a derivative action? A derivative action is a lawsuit against officers or directors brought by shareholders on behalf of the corporation. That is, the shareholders act as representative plaintiff for the corporation and...