Corporate governance is the system used by a board of directors to manage its company. When effective, the procedures and policies implemented will ensure the company’s long-term success. In a nutshell, corporate governance spells out how decisions are to be made within a publicly-traded company. Effective, well-thought-out corporate governance policies promote accountability, efficiency, and transparency in management. As explained by Dr. Patricia Harned, CEO of the Ethics & Compliance Initiative, sound policies help “to safeguard the culture of the organization and ensure that a high standard of conduct is central to business strategy.” (Source: Forbes). “Corporate governance is more than declassifying boards or completing a social responsibility report – it is about making sure companies’ governance processes address conflicts, align interests and increase the likelihood of good decision making so that companies are able to reach their objective of maximizing long-term performance and shareholder value.” Hye-Won Choi, Head of Corporate Governance at TIAA-CREF. Robbins LLP’s attorneys have earned a strong reputation as stalwarts of investors’ rights. We welcome inquiries from investors who are concerned about the corporate governance of companies they have invested in.

What Are The Effects Of Bad Corporate Governance?

Bad corporate governance harms the corporation’s reliability, integrity, and financial health. Corporate executives have obligations to shareholders. When those obligations go unfulfilled, shareholders lose confidence in the company’s business and the company’s reputation suffers. Shareholders may sell their stock, thereby reducing the corporation’s value and damaging its remaining shareholders.