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Corporate Governance

In broad terms, corporate governance refers to the legal standards governing the conduct of a company's directors and officers. It has always been there, but it is more there now than it used to be.

The "business judgment rule" will protect corporate officers and directors acting on behalf of their companies from liability in many cases, even if their judgment is proved wrong with hindsight.

But a plethora of Congressional and SEC actions over the last few years, most notably Sarbanes-Oxley, or SOX, have given corporate officers and directors significantly more to worry about.

During the same period, the Delaware Chancellery has also made its own moves toward ensuring that directors and officers of a Delaware corporation exercise their functions with due care and appropriate loyalty to the company they serve.

Our Governance Roles

EntrepreLaw lawyers have helped public companies implement Sarbanes-Oxley and embellish their prior practices. It is often delicate and complicated work, but at the end of the day it is absolutely necessary to protect directors and officers of publicly traded companies.

Private companies with foresight, whether or not they are considering an IPO, are also looking into implementing SOX.

If an IPO is planned, they will be ready when the time comes. In any event, a private company which implements SOX, even partially, is making the statement that it takes corporate governance very seriously.