company law essay on corporate governance

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Insider Trading and Off-Channel Communications in the Age of Remote and Hybrid Work Environments

Phara Guberman and Kenneth Breen are Partners and Kaitlyn O’Malley is an Associate at Cadwalader, Wickersham & Taft LLP. This post is based on their Cadwalader memorandum.

Though many, if not most, of the measures implemented to address the COVID pandemic have since been rolled back, the transition from fully in-person to remote and hybrid work environments appears to be here to stay. While these arrangements provide employees with additional convenience and flexibility, they also come with risks for companies that are subject to the recordkeeping provisions of federal securities laws and whose employees encounter material nonpublic information (“MNPI”) in the course of their work. Over the past few years, the U.S. Securities and Exchange Commission (“SEC”) has been increasingly aggressive in bringing charges for violations of federal securities laws resulting, at least in part, from the risks associated with remote work environments.

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Investment Advisers and Sponsors Compliance Policies: Hot Topics

Meaghan Kelly , David Blass , and  Michael Osnato  are Partners at Simpson Thacher & Bartlett LLP. This post is based on their Simpson Thacher memorandum.

With Form ADV season in the rear view mirror, we recommend that sponsors turn to refreshing their compliance policies to align with rapidly evolving regulatory expectations. To that end, we provide a non-exhaustive list of hot topics to consider below, including with context from SEC examinations and SEC enforcement settlements.

• Amended Marketing Rule : Sponsors should ensure their policies and procedures are updated to reflect the amended Marketing Rule, including as interpreted by the staff’s FAQs . The compliance deadline was November 4, 2022, and both the Division of Examinations and the Division of Enforcement have been testing compliance and aggressively investigating perceived inadequacies. READ MORE »

Fee Variation in Private Equity

Juliane Begenau is an Associate Professor of Finance at Stanford Graduate School of Business, and Emil Siriwardane is an Associate Professor of Business Administration at Harvard Business School. This post is based on their recent article forthcoming in the Journal of Finance .

The private capital industry has experienced a meteoric rise over the past two decades, with estimates of capital invested in vehicles like private equity and venture capital now exceeding $10 trillion. With this growth, there has been a corresponding increase in calls for greater transparency around the fees and operational structures of private market funds, especially given the amount of capital inflows from public defined-benefit pensions around the globe. Private capital funds, like private equity, are typically governed by complex limited partnership agreements (LPAs). LPAs, which are rarely observable to fund outsiders, are often further modified by so-called side letter agreements. This contracting environment makes it difficult to answer basic questions about costs in this industry, like for instance whether fees are set uniformly within funds or if some investors (LPs) consistently pay lower fees.

Weekly Roundup: May 3-9, 2024

This roundup contains a collection of the posts published on the Forum during the week of May 3-9, 2024

Defenseless companies invite activism

Evolving lines of responsibility between the board and the management, doj pilot program on voluntary self-disclosures for individuals, innovation: the bright side of common ownership, next-gen governance: ai’s role in shareholder proposals, m&a developments: hedge fund activism, sec and nam appeal decision holding proxy advisor rule amendments unlawful, the shareholder franchise, transformative investor changes, and motivational misalignments, stakeholder governance and the eclipse of shareholder primacy, delaware’s status as the favored corporate home: reflections and considerations, the missing “t” in esg, primer on corporate political spending for incoming directors, activism vulnerability report, the effect of female leadership on contracting from capitol hill to main street, exempt solicitation urging blackrock shareholders to vote against the election of saudi aramco ceo.

Comptroller Brad Lander serves as a trustee and the custodian and investment advisor to the City’s pension funds and retirement systems. This post is based on Comptroller Lander’s recent letter to BlackRock shareholders on behalf of the New York City Employees’ Retirement System (NYCERS).

The New York City Employees’ Retirement System (NYCERS) is urging BlackRock shareholders to vote against the appointment of Amin Nasser, CEO of Saudi Aramco, to BlackRock’s Board of Directors at the company’s annual meeting on May 15, 2024. NYCERS has approximately $43 million invested in BlackRock common stock. Additionally, BlackRock manages approximately $19 billion on NYCERS’ behalf.

As summarized in my letter to BlackRock shareholders, potential conflicts of interest compromise Nasser’s ability to provide independent oversight, both in general, and particularly concerning BlackRock’s decarbonization strategy. Moreover, Nasser’s position as CEO of a company implicated in one of the largest alleged climate-related breaches of international human rights law is an unwarranted reputational risk for BlackRock, its Board of Directors, and its shareholders.

Jonathan Brogaard is the Kendall D. Garff Chaired Professor in the Finance department at the University of Utah’s David Eccles School of Business. Nataliya Gerasimova is an Associate Professor of Finance at the Norwegian Business School. Maximilian Rohrer is an Assistant Professor of Finance at the Norwegian School of Economics. The post is based on their article published in the Journal of Financial Economics .

Do female politicians alleviate barriers faced by women-owned-businesses (WOBs)?

It is well established that WOBs are underrepresented in the economy relative to the share of women in society, 36% versus 50%. More strikingly, this under-representation is by an order of magnitude bigger within government procurement:  only 9% of government contracts were allocated to WOBs between 2008 and 2020.  Receiving government contracts has been linked to long-run success, employment growth, and reducing financial frictions for small firms. Hence, alleviating barriers faced by WOBs in government contracting will increase their economic potential.

The main contribution of this paper is to identify a novel channel how female politicians reduced barriers faced by WOBs, namely increased allocation of government contracts. We establish causality by exploiting a regression discontinuity design around mixed-gender elections.

Jason Frankl  and  Brian G. Kushner are Senior Managing Directors and Robert J. Kueppers is Senior Advisor at FTI Consulting. This post is based on a FTI Consulting memorandum by Mr. Frankl, Mr. Kushner, Mr. Kueppers, Kurt Moeller , Tom Kim, and Ryan Chiang .

Introduction

A resilient U.S. economy, with inflation cooling from 2023 levels and interest rates likely peaking, can provide a favorable backdrop for shareholder activism and M&A in 2024. Activist activity was strong in 2023 and there are clear signs that momentum has carried into 2024. We could see activism and M&A activity ramping up over the coming months, as companies seek growth opportunities, and based on the results of our proprietary screener, the most vulnerable industries are Utilities, Airlines & Aviation and Media & Publishing.

Bruce F. Freed  is President and Co-Founder,  Jeanne Hanna  is Research Director, and  Karl Sandstrom  is Strategic Advisor at the Center for Political Accountability. This post is based on their CPA memorandum.

Over the past year, several corporate executives have expressed a concern to the Center for Political Accountability that new members of corporate boards often lack a broad knowledge of corporate political spending and what it entails. They saw this as impairing new directors’ ability to set political spending policies and conduct the due diligence required to protect their company, especially in today’s risk fraught political environment.

They asked that CPA fill the gap. Our recently released Primer on Corporate Political Spending for Incoming Directors does so. As has been the case with the Center’s previous works — the Guide to Corporate Political Spending and the Guide to Becoming a Model Code Company , the Primer reflects the input of corporate executives and directors to ensure that it is a practical guide for discharging a director’s responsibility for overseeing the company’s political engagement.

The Missing “T” in ESG

Danielle Chaim is an Assistant Professor at Bar-Ilan University Faculty of Law, and Gideon Parchomovsky is Wachtell, Lipton, Rosen & Katz Chair in Corporate Law at the Hebrew University of Jerusalem and Robert G. Fuller, Jr. Professor of Law at University of Pennsylvania Carey Law School. This post is based on their recent paper .

In recent years, environmental, Social, and Governance (ESG) investing has reached unprecedented heights. Investors are pouring billions of dollars into funds, prioritizing companies with strong environmental records, positive social impact, and good corporate governance. Proponents of ESG investing hail it as a win-win strategy that promises higher financial returns while addressing pressing global challenges like climate change and social inequality. With a risk of a slight exaggeration, the ESG movement often depicts corporations—and, by extension, institutional investors as their largest shareholders—as modern-day saviors of the world, offering a pathway to a better future. ESG rating agencies rank public corporations based on various ESG indicators, bestowing bragging rights on those with the highest scores, allowing them to attract more investments.

Delaware’s Status as the Favored Corporate Home: Reflections and Considerations

Amy Simmerman , William B. Chandler III , and  David Berger are Partners at Wilson Sonsini Goodrich & Rosati. This post is based on a Wilson Sonsini memorandum by Ms. Simmerman, Mr. Chandler, Mr. Berger, Brad Sorrels , and Ryan Greecher and  is part of the   Delaware Law series ;   links to other posts in the series are available   here .

In recent months, a conversation has emerged as to whether Delaware should remain the favored state of incorporation for business entities. Indeed, many of our clients have asked us whether they should remain in Delaware or choose Delaware as the state of incorporation for their new ventures. In this discussion, we provide our reflections on that question and various factors that entrepreneurs, investors, and companies should consider when weighing incorporation in Delaware against incorporation in another state.

The Reliance on Delaware Compared to Other States

The sheer number of entities formed in Delaware reflects its dominance in this area. In 2022, more than 313,650 entities were formed in the state of Delaware, resulting in more than 1.9 million entities total in Delaware. [1]  Delaware also continues to be the state of incorporation for nearly 68.2 percent of the Fortune 500, 65 percent of the S&P 500, [2] and approximately 79 percent of all U.S. initial public offerings in calendar-year 2022. [3] Of course, those numbers reflect that a substantial portion of entities are incorporated elsewhere, both within and outside of the United States. The Chief Justice of Delaware’s Supreme Court has noted that business entities indirectly or directly generate about a third of the state’s revenue. [4]

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What Is Corporate Governance?

• How It Works
• Board of Directors
• Assessing Corporate Governance

The Bottom Line

• Corporate Finance

Corporate Governance: Definition, Principles, Models, and Examples

Good corporate governance can benefit investors and other stakeholders, while bad governance can lead to scandal and ruin

James Chen, CMT is an expert trader, investment adviser, and global market strategist.

Amanda Bellucco-Chatham is an editor, writer, and fact-checker with years of experience researching personal finance topics. Specialties include general financial planning, career development, lending, retirement, tax preparation, and credit.

Investopedia / Jessica Olah

Corporate governance is the system of rules, practices, and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests of a company's many stakeholders , which can include shareholders, senior management, customers, suppliers, lenders, the government, and the community. As such, corporate governance encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure .

Key Takeaways

• Corporate governance is the structure of rules, practices, and processes used to direct and manage a company.
• A company's board of directors is the primary force influencing corporate governance.
• Bad corporate governance can destroy a company's operations and ultimate profitability.

The basic principles of corporate governance are accountability, transparency, fairness, responsibility, and risk management.

Understanding Corporate Governance

Governance refers to the set of rules, controls, policies, and resolutions put in place to direct corporate behavior. A board of directors is pivotal in governance , while proxy advisors and shareholders are important stakeholders who can affect governance.

Communicating a company's corporate governance is a key component of community and  investor relations . For instance, Apple Inc.'s investor relations site profiles its corporate leadership (the executive team and board of directors) and provides information on its committee charters and governance documents, such as bylaws, stock ownership guidelines, and articles of incorporation .

Most successful companies strive to have exemplary corporate governance. For many shareholders, it is not enough for a company to be profitable; it also must demonstrate good corporate citizenship through environmental awareness, ethical behavior, and other sound corporate governance practices.

Benefits of Corporate Governance

• Good corporate governance creates transparent rules and controls, guides leadership, and aligns the interests of shareholders, directors, management, and employees.
• It helps build trust with investors, the community, and public officials.
• Corporate governance can give investors and stakeholders a clear idea of a company's direction and business integrity.
• It promotes long-term financial viability, opportunity, and returns.
• It can facilitate the raising of capital.
• Good corporate governance can translate to rising share prices.
• It can reduce the potential for financial loss, waste, risks, and corruption.
• It is a game plan for resilience and long-term success.

Corporate Governance and the Board of Directors

The board of directors is the primary direct stakeholder influencing corporate governance. Directors are elected by shareholders or appointed by other board members and charged with representing the interests of the company's shareholders.

The board is tasked with making important decisions, such as corporate officer appointments, executive compensation, and dividend policy. In some instances, board obligations stretch beyond financial optimization, as when shareholder resolutions call for certain social or environmental concerns to be prioritized.

Boards are often made up of a mix of insiders and independent members. Insiders are generally major shareholders, founders, and executives. Independent directors do not share the ties that insiders have. They are typically chosen for their experience managing or directing other large companies. Independents are considered helpful for governance because they dilute the concentration of power and help align shareholder interests with those of the insiders.

The board of directors must ensure that the company's corporate governance policies incorporate corporate strategy, risk management, accountability, transparency, and ethical business practices.

A board of directors should consist of a diverse group of individuals, including those with matching business knowledge and skills, and others who can bring a fresh perspective from outside the company and industry.

The Principles of Corporate Governance

While there can be as many principles as a company believes make sense, some of the most common ones are:

• Fairness : The board of directors must treat shareholders, employees, vendors, and communities fairly and with equal consideration.
• Transparency : The board should provide timely, accurate, and clear information about such things as financial performance, conflicts of interest, and risks to shareholders and other stakeholders.
• Risk Management : The board and management must determine risks of all kinds and how best to control them. They must act on those recommendations to manage risks and inform all relevant parties about the existence and status of risks.
• Responsibility : The board is responsible for the oversight of corporate matters and management activities. It must be aware of and support the successful, ongoing performance of the company. Part of its responsibility is to recruit and hire a chief executive officer (CEO) . It must act in the best interests of a company and its investors.
• Accountability : The board must explain the purpose of a company's activities and the results of its conduct. It and company leadership are accountable for the assessment of a company's capacity, potential, and performance. It must communicate issues of importance to shareholders.

Corporate Governance Models

Different corporate governance models may be found throughout the world. Here are a few of them.

The Anglo-American Model

This model can take various forms, such as the Shareholder, Stewardship, and Political Models. The Shareholder Model is the principal model at present.

The Shareholder Model is designed so that the board of directors and shareholders are in control. Stakeholders such as vendors and employees, though acknowledged, lack control.

Management is tasked with running the company in a way that maximizes shareholder interest. Importantly, proper incentives should be made available to align management behavior with the goals of shareholders/owners.

The model accounts for the fact that shareholders provide the company with funds and may withdraw that support if dissatisfied. This is supposed to keep management working effectively.

The board will usually consist of both insiders and independent members. Although traditionally, the board chairperson and the CEO can be the same, this model seeks to have two different people hold those roles.

The success of this corporate governance model depends on ongoing communications among the board, company management, and the shareholders. Important issues are brought to shareholders' attention. Important decisions that need to be made are put to shareholders for a vote.

U.S. regulatory authorities tend to support shareholders over boards and executive management.

The Continental Model

Two groups represent the controlling authority under the Continental Model. They are the supervisory board and the management board.

In this two-tiered system, the management board is composed of company insiders, such as its executives. The supervisory board is made up of outsiders, such as shareholders and union representatives. Banks with stakes in a company also could have representatives on the supervisory board.

The two boards remain entirely separate. The size of the supervisory board is determined by a country's laws and can't be changed by shareholders.

National interests have a strong influence on corporations with this model of corporate governance. Companies can be expected to align with government objectives.

This model also greatly values the engagement of stakeholders, as they can support and strengthen a company's continued operations.

The Japanese Model

The key players in the Japanese Model of corporate governance are banks, affiliated entities, major shareholders called Keiretsu (who may be invested in common companies or have trading relationships), management, and the government. Smaller, independent, individual shareholders have no role or voice. Together, these key players establish and control corporate governance.

The board of directors is usually made up of insiders, including company executives. Keiretsu may remove directors from the board if profits wane.

The government affects the activities of corporate management via its regulations and policies.

In this model, corporate transparency is less likely because of the concentration of power and the focus on the interests of those with that power.

How to Assess Corporate Governance

As an investor, you want to select companies that practice good corporate governance in the hope that you can thereby avoid losses and other negative consequences such as bankruptcy.

You can research certain areas of a company to determine whether or not it's practicing good corporate governance. These areas include:

• Disclosure practices
• Executive compensation structure (whether it's tied only to performance or also to other metrics)
• Risk management (the checks and balances on decision-making)
• Policies and procedures for reconciling conflicts of interest (how the company approaches business decisions that might conflict with its mission statement)
• The members of the board of directors (their stake in profits or conflicting interests)
• Contractual and social obligations (how a company approaches issues such as climate change)
• Relationships with vendors
• Complaints received from shareholders and how they were addressed
• Audits (the frequency of internal and external audits and how any issues that those audits raised have been handled)

Types of bad governance practices include:

• Companies that do not cooperate sufficiently with auditors or do not select auditors with the appropriate scale, resulting in the publication of spurious or noncompliant financial documents
• Executive compensation packages that fail to create an optimal incentive for corporate officers
• Poorly structured boards that make it too difficult for shareholders to oust ineffective incumbents.

Examples of Corporate Governance: Bad and Good

Bad corporate governance can cast doubt on a company's reliability, integrity, or obligation to shareholders. All can have implications for the financial health of the business.

Volkswagen AG

Tolerance or support of illegal activities can create scandals like the one that rocked Volkswagen AG starting in September 2015. The details of "Dieselgate" (as the affair came to be known) revealed that for years, the automaker had deliberately and systematically rigged engine emission equipment in its cars to manipulate pollution test results in the U.S. and Europe.

Volkswagen saw its stock shed nearly half its value in the days following the start of the scandal. Its global sales in the first full month following the news fell 4.5%.

VW's board structure facilitated the emissions rigging and was a reason it wasn't caught earlier. In contrast to a one-tier board system common to most U.S. companies, VW had a two-tier board system consisting of a management board and a supervisory board, in keeping with the Continental Model of corporate governance.

The supervisory board was meant to monitor management and approve corporate decisions. However, it lacked the independence and authority to carry out these roles appropriately.

The supervisory board included a large portion of shareholders. Ninety percent of shareholder voting rights were controlled by members of the board. There was no real independent supervisor. As a result, shareholders were in control and negated the purpose of the supervisory board, which was to oversee management and employees, and how they operated. This allowed the rigged emissions to occur.

Public and government concern about corporate governance tends to wax and wane. Often, however, highly publicized revelations of corporate malfeasance revive interest in the subject.

For example, corporate governance became a pressing issue in the United States at the turn of the 21st century, after fraudulent practices bankrupted high-profile companies such as Enron and WorldCom .

The problem with Enron was that its board of directors waived many rules related to conflicts of interest by allowing the chief financial officer (CFO) , Andrew Fastow, to create independent, private partnerships to do business with Enron.

These private partnerships were used to hide Enron's debts and liabilities. If they'd been accounted for properly, they would have reduced the company's profits significantly.

Enron's lack of corporate governance allowed the creation of the entities that hid the losses. The company also employed dishonest people, from Fastow down to its traders, who made illegal moves in the markets.

The Enron scandal and others in the same period resulted in the 2002 passage of the Sarbanes-Oxley Act . It imposed more stringent recordkeeping requirements on companies and stiff criminal penalties for violating them and other securities laws. The aim was to restore confidence in public companies and how they operate.

It's common to hear examples of bad corporate governance. In fact, it's often why companies end up in the news. You rarely hear about companies with good corporate governance because their corporate guiding policies keep them out of trouble.

One company that seems to have consistently practiced good corporate governance, and adapts or updates it often, is PepsiCo. In drafting its 2020 proxy statement, PepsiCo sought input from investors in six areas:

• Board composition, diversity, and refreshment, plus leadership structure
• Long-term strategy, corporate purpose, and sustainability issues
• Good governance practices and ethical corporate culture
• Human capital management
• Compensation discussion and analysis
• Shareholder and stakeholder engagement

The company included in its proxy statement a graphic of its current leadership structure. It showed a combined chair and CEO along with an independent presiding director and a link between the company's "Winning With Purpose" vision and changes to the executive compensation program.

What Are the 4 Ps of Corporate Governance?

The four P's of corporate governance are people, process, performance, and purpose.

Why Is Corporate Governance Important?

Corporate governance is important because it creates a system of rules and practices that determines how a company operates and how it aligns with the interest of all its stakeholders. Good corporate governance fosters ethical business practices, which lead to financial viability. In turn, that can attract investors.

What Are the Basic Principles of Corporate Governance?

Corporate governance consists of the guiding principles that a company puts in place to direct all of its operations, from compensation, risk management, and employee treatment to reporting unfair practices, dealing with the impact on the climate, and more.

Corporate governance that calls for upstanding, transparent behavior can lead a company to make ethical decisions that will benefit all of its stakeholders, including investors. Bad corporate governance can lead to the breakdown of a company, often resulting in scandal and bankruptcy.

Apple. " Investor Relations. Leadership and Governance ."

BBC. " Scandal Cuts VW Sales by 4.5% This Year ."

Dibra, Rezart. " Corporate Governance Failure: The Case of Enron and Parmalat ." European Scientific Journal , vol.12, no. 16, June 2016, pp. 283-290.

Corporate Secretary. " PepsiCo Finds Governance Success Through Evolution ."

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The Oxford Handbook of Corporate Law and Governance

Jeffrey N. Gordon is Richard Paul Richman Professor of Law at Columbia Law School.

Wolf-Georg Ringe is Professor of Law and Director of the Institute of Law & Economics at the University of Hamburg.

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This handbook offers a comparative and functional overview of corporate law and governance. It examines the shift from corporate law to corporate governance — from a largely legal emphasis to one that focuses on the corporation’s inputs, outputs and how they are managed and, ultimately, the ways in which governance interacts with other institutional elements that comprise a capitalist system. It also discusses the conventional goals and mechanisms of corporate governance, along with their limitations when applied to banks; the roles and functions of the board of directors, how boards fail, and the reforms that have been tried to improve their performance; how mergers and acquisitions are regulated; and the functions of corporate accounting and financial reporting worldwide. Other chapters deal with the ‘corporate law’ issues involved in the regulation of takeovers; the relationship between corporate governance and employment relations; fundamental issues of corporate insolvency law; legal and policy issues relating to transactions between a corporation and one of its ‘related parties’; current trends in the regulation and practice of executive remuneration; corporate governance in closely held corporations; and economic benefits and costs of external and internal asset partitioning in corporations.

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From Corporate Law to Corporate Governance

Working paper author/authors.

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Date published:, last revised:, quick links.

This essay is a contribution to the forthcoming Oxford University Press Handbook of Corporate Law and Governance edited by Jeffery Gordon and Georg Ringe. In the 1960s and 1970s, corporate law and finance scholars recognized that neither discipline was doing a very good job of explaining how corporations were really structured and performed. For legal scholars, Yale Law School professor and then Stanford Law School dean Bayless Manning confessed that corporate law has “nothing left but our great empty corporation statutes – towering skyscrapers of rusted girders, internally welded together and containing nothing but wind.” Michael Jensen and William Meckling made a similar comment with respect to finance. The theory of the firm was an “empty box” or a “black box” that provided no theory about “how the conflicting objectives of the individual participants are brought into equilibrium.” The result of Jensen and Meckling’s seminal reframing of corporate law in agency cost terms, and so into something far broader than disputes over statutory language, was that both Manning’s empty skyscrapers and Jensen and Meckling’s empty box began to be filled.

The essay proceeds by tracking how corporate law became corporate governance – from legal rules standing alone to legal rules interacting with non-legal processes and institutions – through three somewhat idiosyncratically chosen but nonetheless related examples of how we have come to usefully complicate the inquiry into the structures that bear on corporate decision-making and performance. Part I frames the first level of complication in moving from law to governance by defining governance broadly as the company’s operating system, a braided framework encompassing legal and non-legal elements. Part II then adds a second level of complication by treating corporate governance dynamically: corporate governance becomes a path dependent outcome of the tools available when a national governance system begins taking shape, and the process by which elements are added to the governance system going forward – driven by what Paul Milgrom and John Roberts call “supermodularity.” That characteristic reads importantly on both the difficulty of corporate governance, as opposed to corporate law, reform and the non-intuitive pattern of the results of reform: significant reform leads to things getting worse before they get better. Part II then further complicates corporate governance by expanding it beyond the boundaries of the corporation, treating particular governance regimes as complementary to other social structures – for example, the labor market, the capital market and the political structure – that together define different varieties of capitalism. Next, Part III considers commonplace, but I will suggest misguided, efforts to take a different tack from Parts I and II: to simplify rather than complicate corporate governance analysis by recourse to now familiar single factor analytic models: stakeholder theory, team production, director primacy, and shareholder primacy. Part III suggests that these reductions are neither models nor particularly helpful; they neither bridge the contextual specificity of most corporate governance analysis nor address the necessary interaction in allocating responsibilities among shareholders, teams and directors. As well, these “models” are static rather than dynamic, a serious failing in an era in which the second derivative of change is positive in many business environments and Schumpeter seems to be getting the better of Burke. Part IV concludes by examining the importance of a corporate governance system’s capacity to respond to changes in the business environment: the greater the rate of change, the more important is a governance system’s capacity to adapt and the less important its ability to support long-term firm-specific investment.

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Corporate Law & Corporate Governance

Getting started, primary sources, secondary sources, practice materials & study aids, current awareness, corporate data, getting help.

This guide is meant to help you find laws and information on corporate law issues; the goal is to provide useful, but not exhaustive, resources.  If you are looking for resources to research  companies and/or industries, look at this other HLS Guide . 

Research requires analysis and synthesis of information, and no one resource will likely provide sufficient information or data on any given topic.  Cast a broad net first, and then focus on your specific issue.

Some of the main topics involved in corporate governance include executive compensation, board composition, diversity, shareholder engagement, and sustainability.

Keeping that in mind while conducting your research, you may want to explore: 

Laws and regulations governing corporate law

Government agencies controlling corporate law

Practice and study aids, i.e.,  corporate law treatises

News sources, including blogs

Practical and scholarly articles

• Data on executive compensation, shareholder agreements & more

For many of these databases, you will need your Harvard University ID and PIN.  For others, you may need to register to gain access.  If you have any trouble accessing a database, please contact the library.

Subject Guide

Corporation Statutes, Model Laws, and Regulations

• Delaware General Corporation Law Title 8 of the Delaware Code
• Laws that Govern the Securities Industry Including the texts of the Securities Act of 1933, Securities Exchange Act of 1934, Sarbanes-Oxley, and Dodd-Frank.
• Uniform Partnership Act
• Uniform Limited Liability Company Act

• Code of Federal Regulations Title 17 covers the Securities and Exchange Commission
• Business Source Complete (Harvard Login) more... less... The EBSCOhost Interface is optimized for searching articles. The Business Searching Interface facilitates searching other types of documents as well as articles. Business Source Complete is a database of citations to, summaries and full text of articles from academic journals, magazines, and trade publications. Citations, indexing and abstracts for the most important scholarly business journals back to 1886 are included as well as current company, industry and region reports.
• Google Scholar Academic and scientific research papers on the web.

• SSRN's Corporate Governance Research Center The The Corporate Governance Network (CGN) is directed by Lucian Bebchuk, William J. Friedman and Alicia Townsend Friedman Professor of Law, Economics, and Finance, and Director of the Corporate Governance Program, at Harvard Law School, with input and help from other members of the Corporate Governance Program.
• Corporate Governance:  An International Review
• Corporate Governance from the OECD
• Journal of Management and Governance

Google Scholar

Government Regulation & Oversight

• Securities & Exchange Commission (SEC)
• US Senate Committee on Finance
• US House Committee on Financial Services
• European Commission: Corporation Governance Forum

Practice Pages

Practice and Study Aids

• CCH Corporate Governance Guide
• Getting the Deal Through (Lexology) The Getting the Deal Through (GTDT) module of Lexology lets you quickly compare laws across different countries. The Corporate Governance section allows you to compare laws regarding governance, shareholder rights, voting rights & requirements, board structures, reporting requirements and more, across specified international jurisdictions.
• NYSE Corporate Governance: A Practical Guide The NY Stock Exchange has created a guide to help listed companies navigate key corporate governance issues.
• FT.com - The Financial Times Registration required.
• Law360 News
• LexisNexis Legal Newsroom - Corporate
• Delaware Corporate & Commercial Litigation Blog
• New York Times Deal Book
• HLS Forum on Corporate Governance and Financial Regulation
• ISS Governance Insights
• The Race to the Bottom
• The Conference Board Governance Center Blog

Sources of Data

In addition to using the  Bloomberg Law , Westlaw , and Lexis's Intelligize  research platforms, there are a variety of other databases for corporate, and finance-related data. For more information, check out:

• The Library's Research Guide on Statistical and Data-Related Resources  (section on "Business, Corporate, Finance, and Market Data")
• Baker Library Databases
• Baker Library's collection of Fast Answers (a FAQ)

Also check out the information and links below.

• Bloomberg Terminal A Bloomberg Terminal, providing hard financial data, is located in the Research Room (Room #353, located near the Reference Area on the 3rd floor of the Library). Please note you will need to create a separate Bloomberg Terminal account using your HLS email.
• Capital IQ Data on public and private companies, investment firms, capital transactions, and people. Provides sophisticated retrieval and personalization tools to create numerous reports.
• Global Financial Data (GFD) A comprehensive economic and financial time-series database covering 150 countries and 6,500 different data series. GFD includes data on stock markets from 1690, exchange rates from 1590, interest rates from 1700, commodities from 1500, and inflation from 1264. If you don't want to create an account, you can log in anonymously for more limited data access.
• Orbis A global company database that provides extensive data about a company. ORBIS allows you to screen for companies based on geography, financial performance, industry, deals, ownership structure, number of employees, year of incorporation and other criteria; and compare a company to its competitors along multiple dimensions.
• SharkWatch (formerly SharkRepellent) Searchable database of takeover defense intelligence, including more than 200 charter bylaw and poison pill data items covering US publicly traded companies. SharkRepellent is available through the FactSet research platform. Refer to the box below for information on creating a FactSet account.
• Wharton Research Data Services (WRDS) WRDS provides access to key databases in the fields of accounting, banking, economics, finance, management, marketing and public policy from leading information providers, including, among others, COMPUSTAT and CRSP. Must register for an individual account to access WRDS data. Click on the "Register" tab at the top to request an account.

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• Last Updated: Apr 12, 2024 4:50 PM
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Free Corporate Governance Essay Examples & Topics

Corporate governance is a set of policies and rules used to direct and control a company’s operations. It is essential for managing a firm and balancing the interests of the stakeholders, shareholders, executive directors, suppliers, and customers. Accountability, transparency, fairness, and responsibility form the corporate governance framework.

Assigned a corporate governance essay? Our IvyPanda team is ready to help you with this task. But before all else, let’s learn its essential aspects.

There are a few key principles of corporate governance. Firstly , shareholders have control over the boards. Their voting rights directly depend on their economic interests.

Secondly , boards should keep in touch with the shareholders and meet their expectations. Thus, they should have strong leadership skills. In essence, they are responsible for enhancing the effectiveness and adopting new practices.

Finally , boards should develop a working management system. Its goal is to positively affect a company’s performance in the long run.

In this article, we have collected corporate governance essay questions and examples. They will assist you in preparing and writing your paper. Additionally, you will find free samples written by fellow students.

Great Corporate Governance Essay Questions

Checking corporate governance assignment topics can be useful for many reasons:

• You can look through multiple ideas at the same time. Thus, you may understand what it would be interesting to write about.
• Different ideas can show you how to formulate your own topic.
• Lastly, you can find an idea for your work.

We have put together a small list for you to check. Find more ideas by trying our title generator . It will create new topics for your paper automatically.

Here are some corporate governance topics:

• What is corporate governance? How do you implement it correctly?
• The role of the audit committee in developing an effective financial management strategy.
• What are some examples of corporate governance approaches in American firms?
• Should employees who have children with disabilities have extra social care benefits?
• Accounting fraud and possible ways to deter it.
• The role of business ethics in striving for equality and eliminating discrimination at the workplace.
• Top 5 the most effective governance models.
• Governance research in developing an efficient long-term managing strategy.
• What are the similarities and differences in corporate governance principles in public and private firms?
• Advantages and disadvantages of cultural diversity at the workplace.
• How can corporate governance help prevent the firm’s economic crisis?
• Structure hierarchy vs. flat management model. What is more appropriate for governing large corporations?
• Agency relationship between two parties. Possible problems that may occur in this kind of cooperation.
• The effect of corporate social responsibility on a firm’s image and reputation.
• How to recover from failures in project management and take the maximum benefit from them.
• The importance of having a clear mission statement for the company’s reputation in the market.
• How can a company reach sustainability in terms of production and distribution of the products?

5 Corporate Governance Examples

In your essay, you can consider examples of corporate governance for different reasons. They can be used as a subject of discussion, evaluation, or as supporting evidence. That’s why we have provided some good examples in this section:

• Integrated business management system (IBMS)

In most organizations, each department has its own key performance indicators. Yet, it is essential to see a holistic picture of the company’s performance. One of the solutions is to imply IBMS and combine all management systems. IMBS ensures transparency, cross-departmental collaboration, traceability, and visibility.

• Regular internal audits

The role of routine internal audits cannot be underestimated. They allow identifying current problems and vulnerabilities in the company. Moreover, audits help evaluate the corporate environment and make some adjustments if needed.

• Training management system

Investments in employees’ training are always a great idea! The knowledge and skills that the workers acquire during the courses will bring valuable input to a company. Thus, simple training can boost the company’s performance to a great extent.

• Risk management

Identifying, accessing, and managing the risk are the key elements of successful corporate governance. It is essential for the company’s managers to acknowledge the possible threats. Plus, they should have a clear plan of how to overcome these obstacles.

Successful management relies on valid data. Therefore, it is essential to report true key performance indicators. It will help evaluate the firm’s achievements and adjust the strategy if needed.

Thank you for reading! Below, see corporate governance, diversity, and inclusion essay examples. They will help you better understand the subject and how to write about it. You can shorten each paper with our summarizer to read them faster.

202 Best Essay Examples on Corporate Governance

Environmental, social and corporate governance.

• Words: 1468

Etisalat Company: Organization Theory and Design

• Words: 1145

What is corporate governance?

• Words: 1152

Starbucks: Corporate Finance Analysis

• Words: 3753

The Roles of an Internal Auditor in Corporate Governance

Delta airlines: corporate governance and leadership issues.

• Words: 2618

British Petroleum Company’s Corporate Governance Failure

Corporate governance and corporate social responsibility.

• Words: 2731

Organizational Structure at Starbucks

• Words: 1057

Cross-Cultural Management and HRM in Walmart

• Words: 3606

The Anglo- American Model and the European Model of Corporate Governance

• Words: 2203

Inclusion and Diversity

Bureaucracy in an organization, corporate governance in satyam computer services ltd.

• Words: 3197

Singapore Post Limited’s Corporate Governance

• Words: 2503

Agency Theory in Corporate Governance: Criticism and Real Application

• Words: 3867

Effective Project Governance in Organizations

• Words: 2999

Twenty four hour garage

• Words: 1604

The Concept of Organizational Commitment in Human Resource Management

Corporate governance practice: nike in vietnam.

• Words: 11113

Corporate Governance in the Documentary “Inside Job”

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Executive Compensation and Board of Directors’ Decisions

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Agency Theory: The “Combined Code” and the SOX

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Evaluation of Corporate Performance

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Directors of The Procter & Gamble Company

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The Kraft – Cadbury Takeover and the Glencore-Xstrata Merger

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Regulations in Corporate Governance

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Deming: 14 points of transformation.

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Corporate Governance and Disclosures on the Transition to International Financial Reporting Standards

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How Corporate Leadership Controls Hotel Franchise

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• Words: 1342

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Master of Science

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LL.M CORPORATE GOVERNANCE AND LAW DISSERTATION

This dissertation examined the question ‘Has section 172 (“s172”) of the UK’s Companies Act (“CA”) 2006 created an effective set of directors’ duties’? Prior to the advent of s172 CA 2006, there was no statutory form of direction concerning directors’ duties and obligations. However, with the intervention of s172, the pressure to take other stakeholders into consideration in the management of corporate affairs is now recognized . Therefore, the essence of this research was to examine whether the law has adequately reflected a shift from the previous common law position, which favored shareholder primacy to a more inclusive approach .

Related Papers

Professor Kato Gogo Kingston, PhD.

Angus Young

Directors of listed entities in the United Kingdom are about to face greater demands from recent discussions on corporate governance reforms, in particular compliance with the obligations in section 172 of the Companies Act 2006. This article argues that leadership in a multistakeholder regime has become more important than ever.

Academia Letters

Ravi Ranjan Singh

Corporate Board: role, duties and composition

It is suggested in the paper that section 176 is too compendious in its drafting. A consequence of this is that the declared objectives of the CLR to make the law comprehensible and, therefore, accessible is undermined. It fails to capture the essence of the principles that have emerged from the case law on the no-conflicts rule and the corporate opportunity. Further, the differing approaches towards the determination of liability by the Court of Appeal in Bhullar, on the one hand, and the more open textured approach towards the issue in Pyke, illustrates the dichotomy of the case law surrounding the corporate opportunity doctrine which the language of section 176 fails to resolve.

Osgoode Hall Law Journal

Sean Vanderpol

Gary Tarafder

System of corporate governance in the economic environment is considered as a modern structure that covers various Science and involves multidisciplinary. Corporate Governance is concerned with the scope of various groups including majority and minority of shareholders, board of director and etc. The board of directors of a company is responsible for monitoring progress. Each director has a duty to act, in the best interests of the company. But there may be conflict between personal interests of director and interests of the manager who is responsible for managing it or does not comply with the company's interests. In this article we will examine the civil and criminal sanction of director's authority.

SSRN Electronic Journal

Shann Turnbull

Kris Panijpan

Business Law Review

On the 10th September last year, the Law Commission published its eagerly awaited consultation paper entitled Company Directors: Regulating Conflicts of Interests and Formulating a Statement of Duties (Law Com Consultation Paper No. 153). The paper addressed two burning issues in the area of corporate governance, namely the future of Part X of the Companies Act 1985 and the desirability and content of a statutory statement of directors’ duties. This article concentrates on the latter issue, specifically the issue of whether the duty should be subjective, objective or a combination of the two.

Social Science Research Network

Howard Gospel

Since the early 1990s, the UK has been very active in undertaking policy reforms that includes a number of corporate governance codes, expert reports, a high level review of company law, and new regulations and legislation. These policy initiatives need to be monitored and evaluated in terms oftheir success in influencing the key drivers of 'good' corporate governance. This Report undertaken for the DTI has several aims: to identify key drivers of good corporate governance based on a review of social science literature; to describe the content of UK regulatory initiatives with regard to those drivers; and to evaluate gaps in the content and implementation of UK policy regarding corporate governance, using those drivers as benchmarks. In addition, some further implications of this study are discussed for future policy and research on UK corporate governance. The Report defines 'good' corporate governance with regard to the rights and responsibilities of company stakeh...

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Journal on Corporate Law & Governance

The Journal

Centre for Corporate Governance is a research hub under the rubrics of National Law University, Jodhpur, dedicated to research and development of governance standards for the corporate world. In order to promote holistic research on areas covered within the wide ambit of corporate law, the Centre came out with an annual publication in 2008, known as Journal on Governance.

Comment on Corporate Governance

– Shree Kumar Mangalam Birla

Independent Directors: Pragmatic and Effective or toothless tigers

-Kunal Kumbhat

"G" in ESG- The steering force of the Company

– Manendra Singh & Tanvi Goyal

Mainstreaming ESG and role of the Board

-Dr. Niraj Gupta & Amar Chanchal

Regulating Proxy Advisory Firms in India

-Debkanya Naskar

Making business Dispute resolution easy in India: Arbitration clause needs to be taken seriously

– Prof. Anurag K. Agarwal

‘Virtual’ Power Purchase Agreements: Legal status and regulatory framework in India

-Dr. Deborshi Barat

EU Anchors Human Rights and Environment in Company Supply Chains

The European Parliament formally adopted the Corporate Sustainability Due Diligence Directive, or CSDDD , on April 24, marking a significant advance for the sustainability agenda in the EU.

This milestone builds on prior approval from the European Council. Despite initial opposition from Germany, France, and Italy, the member states managed to reach a compromise—a compromise that required scaling back the scope and timeline.

The directive sets out requirements to ensure that the goods offered in the EU aren’t produced in violation of basic protection criteria for people and the environment. For European companies that benefit from the advantages of global supply chains, this implies an obligation to use them without compromising a basic level of protection for all those involved.

The directive affects large EU and non-EU companies in relation to the potential adverse effects of their operations, as well as those of their direct and indirect commercial partners (only for upstream activities). There is a phase-in calendar for the provisions from three to five years depending on companies’ size and turnover

Adjustments this year have resulted in approximately 5,500 companies falling within the directive’s scope, representing a reduction of nearly 70% compared to the previous agreement reached in December. In the negotiations , thresholds were raised to 1,000 employees and a turnover of 450 million euros ($480 million), and the threshold for non-EU companies operating within the EU was raised to a net turnover of more than 450 million euros in the Union.

Tax Implications

The CSDDD could overhaul an organization’s supply chain, changing its underlying value drivers and economics, by shifting how and where it operates. For example, greening the supply chain may shorten it geographically. New value may be driven from green intellectual property and technology as well as renewable energy generation.

Transformations of this kind upend transfer pricing and intellectual property models as they take organizations into new markets and value chains while exiting or restructuring others. And as the physical and transactional footprint of the goods changes, so will an organization’s indirect tax and customs profile.

Organizations should make sure they carry out a tax value chain analysis on their refined business model, which should be the first step toward managing the intellectual property, transfer pricing, and indirect tax consequences.

Change of this kind is an opportunity to reassess an organization’s tax position. Choices around the source goods or materials and their transport method will affect the customs and excise duty position. Such decisions may also allow companies to unlock value-added tax trapped in the supply chain.

Similarly, as sustainable procurement takes a more prominent role in organizations, tax leaders will need to value its contribution for transfer pricing purposes.

Corporate Responsibilities

Activities in scope . The scope of due diligence obligations has caused considerable debate, with a key point of contention around the extent of activities it covers. Amendments have targeted direct business partners rather than indirect ones. References to financial activities and sector-specific details have been removed from the downstream part of the covered activities.

Due diligence and response actions . The directive standardizes a two-stage system for preventing and ending violations of human rights and environmental protection standards. First, companies are required to take appropriate measures to prevent the production or promotion of products that violate such standards. This includes comprehensive due diligence along the supply chain and the obligation to enforce minimum standards with suppliers.

Second, companies are obliged to actively intervene in the event of grievances identified in their supply chains, whether through warnings, audits, or the termination of business relationships.

The proposal also includes provisions to adopt and carry out a transition plan for climate change mitigation (excluding those companies already fulfilling this under the Corporate Sustainability and Reporting Directive ) .

Civil liability . Violations of due diligence and response obligations can lead to civil liability in addition to public law sanctions. However, the provisions on civil liability have been amended to give more flexibility to member states, and there is no express inclusion of director’s liability.

What’s Next

After having received approval from the European Parliament, the CSDDD awaits formal endorsement by the Council. After this, and following the publication of the final text in the Official Journal of the EU, the directive will take effect 20 days later.

At this point, EU member states will have a period of two years to transpose the directive into national law and adapt their legislation with the provisions outlined in the directive. The phasing in period will be implemented gradually, culminating in the full application of the rules for the largest companies falling within the scope by mid-2027.

The directive aims to strengthen corporate responsibility for sustainability—reinforcing the role that businesses can play in protecting the environment and human rights while not placing an excessive burden on the competitiveness of European companies. The concern for the potential burden for small and medium-sized enterprises and the related costs has been the main reason for the delay in reaching a consensus in the Council.

It may not be relevant that the directive won’t directly apply to as many companies as initially proposed. It will have a much greater effect, as it will trigger supply chain expectations that will shape contracts, investor questions, and a level playing field for companies on environmental and human rights due diligence—affecting EU and non-EU companies. This directive is a real game changer.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Pilar Galán Gavilá is partner with KPMG and global ESG legal lead.

Dharini Minawala is a senior manager, KPMG global ESG tax & legal.

Matilde Whittaker Mancha is a paralegal with KPMG.

Write for Us: Author Guidelines

To contact the editor responsible for this story: Katharine Butler at [email protected]

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Alaska Mine Road’s Future Hinges on Obscure National Parks Law

By Bobby Magill

The future of a remote Alaska copper and cobalt trove will turn in part on whether the spirit or the letter of a 1980 federal national parks law matters most in the Interior’s Department’s ability to block access to the potential mines.

Interior Secretary Deb Haaland told a Senate Appropriations subcommittee May 8 that the Bureau of Land Management can block the proposed 211-mile Ambler Road and effectively cancel the project because the Alaska National Interest Lands Conservation Act, or ANILCA , doesn’t explicitly require the Interior Department to permit the road across 24 miles of federal land managed by the BLM.

The legality of that position is unclear, and legal analysts say it’ll be up to the courts to iron out whether blocking the road on BLM land complies with a law that explicitly permits the road on National Park Service land.

The state of Alaska has threatened to sue if the BLM stands in the way of road construction. The bureau is expected to issue a final decision before the end of the quarter.

“I think there are two sides to this question, and it looks like a federal judge will decide whether the ANILCA language is strictly mandatory, or allows for some discretion on the part of the BLM,” said Tom Meacham, an independent attorney in Anchorage and a former Alaska assistant attorney general who supported ANILCA when it was drafted.

At stake is a potential domestic source of critical minerals considered important for electric vehicle batteries and renewable energy, including 3.36 billion pounds of copper, plus cobalt and other metals. The mines would be in one of the last fully intact ecosystems in North America and surrounded by the country’s largest unbroken complex of national parks, preserves, and wilderness areas.

Ambler Road Plan

Ambler Metals and the NANA Regional Corp. are considering developing possible copper and cobalt mines within the Ambler Mining District on the south flank of Alaska’s Brooks Range, about 200 miles from the Alaska Pipeline Haul Road—now called the Dalton Highway, the nearest connection to North America’s highway system.

To reach the mining district, the state is proposing the private gravel Ambler Road, part of the Ambler Access Project , which would cost up to $992 million to build and cross mostly state lands to reach the mines. It would also cross Gates of the Arctic National Preserve managed by the National Park Service and small parcels of BLM land.

ANILCA, which created vast new national parks and preserves across Alaska on a total acreage of federal land equal to the land mass of California, stipulated that the BLM “shall permit” a transportation corridor between the Dalton Highway and the Ambler Mining District across Gates of the Arctic National Preserve, but makes no mention of BLM land.

The law waived provisions of the National Environmental Policy Act within the preserve, requiring Interior to conduct an environmental and economic analysis only as a way to determine the best route for the road. Congress also waived judicial review for the analysis.

But the Biden administration scrapped a Trump-era decision to approve the road and completed a new environmental review in April, picking the plan’s “no action” alternative as the BLM’s preference, which would effectively kill the project. A final decision is expected in the coming weeks.

The BLM said in its environmental review that ANILCA doesn’t exempt BLM land from NEPA the way it does so for National Park Service land, nor did the law exempt the road from provisions of the Clean Water Act as it crosses thousands of streams.

Sen. Lisa Murkowski (R-Alaska) said at the May 8 Senate Appropriations panel hearing that Congress made a trade-off when it passed ANILCA: Federal land was protected as new national parks and preserves, and Alaskans gained access to natural resources, including the Ambler mining area.

The law makes it clear that Congress intended for the Interior Department to permit the road between the Ambler Mining District and the haul road, even if it doesn’t explicitly mention BLM land, Murkowski said.

NANA said in a statement that access to the Ambler district is mandated by Congress. The Interior Department declined to comment.

Alaska may have a “decent argument on the law,” but re-routing the road around NANA land would create further complications and expense for the state, according to Mark Squillace, a natural resources law professor at the University of Colorado Law School.

“Given the high cost of this project, and the serious adverse impacts to the environment and Native Alaskan communities, Interior may have simply concluded that this is a fight worth waging, even if, in the end, they may lose,” Squillace said.

Robby Dube, a senior associate at Eckland & Blando LLP in Minneapolis who has written about ANILCA, said the BLM is being “too cute” and the law’s “shall permit” language mandates agency action.

“Congress’ intent is pretty clear,” Dube said. “A road shall be built. Access was a mandatory point in Congress’ language.”

But ANILCA doesn’t give the federal government permission to overlook other environmental regulations to build the road, which would cross thousands of streams, environmentalists say.

“This project never should have been authorized in the first place because of the number of legal problems and the amount of damage it would cause,” said Suzanne Bostrom, senior staff attorney for Trustees for Alaska, an environmental group.

John Leshy, who served as Interior solicitor during the Clinton administration, said the law provides ample room for Interior to block the road because it required an analysis of the best route and alternatives to avoid impacts to the environment and rural and traditional lifestyles.

The current Ambler Road proposal and its funding sources are unclear and without any specific mine proposals on the table, it’s hard for Interior to weigh alternatives for the road, said Leshy, now an emeritus law professor at the University of California College of the Law.

Ambler Metals is prospecting within the district but hasn’t made a final decision about whether to propose a specific mine.

NANA, which partners with Ambler Metals and owns much of the land that the company would mine, announced May 8 that it is withdrawing from the state’s current road proposal, but not the possible mine itself.

The state said it’s now considering a new route that would circumnavigate NANA land, casting new uncertainty on the future of Ambler Road.

To contact the reporter on this story: Bobby Magill at [email protected]

To contact the editors responsible for this story: Zachary Sherwood at [email protected] ; Brent Bierman at [email protected]

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