Corporate governance—USA focus
Corporate governance—USA focus

The following Corporate guidance note provides comprehensive and up to date legal information covering:

  • Corporate governance—USA focus
  • Background
  • Regulatory architecture
  • Directors’ duties and liabilities
  • Board organisation and procedure
  • Executive remuneration
  • Institutional investor groups
  • Recent developments

Background

Unlike the UK, the USA has not adopted a unified corporate governance code for its public corporations. Instead corporate governance requirements are derived from a variety of federal and state laws, including the following:

  1. the laws of the state in which the corporation is incorporated and any other states in which it does business, such as the Delaware General Corporation Law (DGCL) (Delaware typically being the state where most US public corporations are registered)

  2. federal securities laws, most obviously the Securities Act of 1933 (SA 1933), the Securities Exchange Act of 1934 (SEA 1934) and the Investment Company Act of 1940, supported by a significant body of other rules and regulatory guidance issued by the Securities and Exchange Commission (SEC), (for example Regulation S-K under the SA 1933 which governs SEC filings by public companies)

  3. other federal laws, including the Public Company Accounting Reform and Investor Protection Act of 2002 (Sarbanes-Oxley Act) which provides direct federal regulation of many matters that traditionally had been left to state law or addressed by federal law through disclosure requirements, and the Dodd-Frank Wall Street Reform and Consumer Protection Act 2010 (Dodd-Frank Act) which contains a wide variety of material aimed at resolving some of the issues that arose out of the 2008 financial crisis. The SEC has introduced several rules that