Frequently Asked Questions

What is corporate governance and how does it relate to corporate law?

Corporate governance refers to the system of rules, practices, and processes by which a company is directed and controlled. It involves balancing the interests of a company's many stakeholders, such as shareholders, management, customers, suppliers, financiers, government, and the community. It is essentially a framework that helps ensure accountability, fairness, and transparency in a company's relationship with all its stakeholders. On the other hand, corporate law is a legal field that focuses on the legal aspects of business activities, including the creation, operation, and dissolution of corporations. It is governed by state laws and, in certain industries, federal laws as well. Corporate law provides the legal backbone to corporate governance, setting the legal limits within which corporations must operate. The relationship between corporate governance and corporate law is symbiotic. Corporate governance policies and procedures must be designed and implemented within the boundaries set by corporate law. For instance, a corporation's articles of association, which are a key element of corporate governance, must adhere to federal and state corporate laws. Similarly, corporate law impacts corporate governance by dictating the legal responsibilities and obligations of corporate directors and officers.