Corporate Governance

AuthorBert Spector
ProfessionProfessor of Strategy at Northeastern University
Corporate Governance 77
Perhaps no issue relating to the world of business has attracted more atten-
tion in recent years than that of corporate governance. Broadly speaki ng,
corporate governance refers to the framework employed by a corpora-
tion—as established in its charter through the articles of incorporation—to
ensure that the business is being run effectively and in a way that advances
the interests of the shareholders who have invested their capital. The board
of directors—the group that sits at the intersection of shareholders and
executives—shares the fiduciar y responsibility with top executives to act in
the best interests of the corporation. It must perform its duties in compli-
ance with prevailing laws and reg ulations.
Governance matters are rich in lega l implications. In-house and out-
side counsels play a vital, complex role in ensuring good governance and
adequate complia nce. Recent federal legislation recognizes and codifies the
relationship between legal counsel and compliance, thus increasing the sig-
nificance of understandin g the dynamics of governance. But governance
is about more than compliance; it is about the proper management of the
corporation’s affairs.

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