Robbins Arroyo LLP works vigorously on behalf of shareholders to improve corporate governance practices, procedures, protocols, guidelines, and policies, when companies are damaged by financial fraud, mismanagement, or other fiduciary misconduct. Corporate executives are legally obligated to run their companies with shareholders’ best interests in mind. When they do not, shareholders need not helplessly stand by. Robbins Arroyo LLP empowers shareholder clients to effectuate corporate governance reform. Shareholder derivative litigation and shareholder litigation and inspection demands are important tools available to shareholders to force corporate officers and directors to improve the transparency, effectiveness, and accountability of the companies they run.
Corporate Governance: A Definition
Corporate governance refers to the procedures and policies according to which a company is directed and controlled. The corporate governance structure details the distribution of rights and responsibilities among the board of directors, executive managers, shareholders, and other stakeholders and lays down the rules and protocols for decision-making. Sound corporate governance procedures and policies provide a framework for accountable, efficient, and transparent management of publicly traded companies.
Corporate Governance Reforms Benefit Shareholders
Just as preventative measures, like a balanced diet and exercise, can help a person stay healthy and ward off illness and disease, sound corporate governance policies can act as a safeguard against value destroying mismanagement, self-dealing, and misconduct.
Good corporate governance practices and policies can:
- Improve board oversight of operations and provide for greater accountability
- Enhance director independence
- Better align corporate and shareholder interests
- Increase shareholder value by enhancing investor confidence
McKinsey & Company has observed that, “High governance standards will prove essential to attracting and retaining investors in globalized capital markets, while failure to reform is likely to hinder those companies with global ambitions.”
Robbins Arroyo LLP Champions Corporate Governance Reforms
Robbins Arroyo LLP attorneys have been the driving force behind corporate governance reforms adopted by more than 70 companies in the Fortune 1000, including:
Greater director independence from management:
- Tougher independence standards for members of the board of directors
- Separation of the roles of chairman and chief executive officer
- Board seats for shareholder nominated directors
- Increased board size
- Annual self-evaluations
- Term limits for the board and committee members
Enhanced compliance and transparency:
- Insider trading rules and controls
- Rotation of auditors and audit partners
- Establishment of company hotlines for reporting wrongdoing
- Enhanced whistleblower protections
- Strengthened internal compliance policies, staffing, and reporting
- Compensation clawbacks
A History of Success: Exemplary Cases of Corporate Governance Reform
Robbins Arroyo LLP has helped many publicly traded companies to improve their corporate governance practices through shareholder litigation. To learn more, visit our Noteworthy Cases.
“The best way I have to make changes is to be involved with law firms which have had success with bringing lawsuits against companies with bad corporate governance practices.” - Robert Monks, Shareholder Activist
“Corporate Governance mechanisms, ideally, should protect the interests of all investors against corporate managers whose own interest may not necessarily coincide with those of the company’s shareholders.”
- International Organization of Securities Commissions