Drafting Corporate Governance Documents

Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom.
Also note: This is not legal advice.

Introduction

Good corporate governance is essential for businesses to thrive. By making sure that policies and practices are responsibly managed and transparently reported, organisations can ensure that their operations align with the interests of all stakeholders, including shareholders, customers, employees and the wider community.

The Genie AI team knows that having a board of directors who are independent and accountable is fundamental to good corporate governance. The Board is responsible for managing the company’s operations in an impartial way and should be able to update shareholders on their decisions. As part of this role, they should have the authority to appoint executive officers and set their compensation according to performance-based criteria. In addition, the Board should be able to decide upon strategic objectives for the organisation and monitor progress towards these goals.

In tandem with independent directors comes legal documentation – such as codes of conduct or anti-corruption policies – which guarantees that companies operate in accordance with regulations while protecting everyone’s interests equally. The Genie AI community template library provides free documents of this kind in order to facilitate responsible management within any organisation whilst keeping costs at bay. Furthermore, our step-by-step guidance enables readers to access these templates quickly without needing a Genie AI account - we just want to help!

To summarise - when it comes down it good corporate governance matters because it ensures companies operate ethically while minimising potential risks such as fraud or corruption which can damage public trust. For more detailed advice on how you can achieve this today read on below for more information from the Genie AI team…

Definitions (feel free to skip)

Stakeholders: People or organizations that have a vested interest in the success of a company.
Bylaws: Rules and regulations that outline the operations and management of a company.
Corporate Charter: A legal document that establishes a company and defines its purpose and powers.
Code of Conduct: A set of rules outlining the ethical and legal standards of behavior expected of a company’s personnel.
Sarbanes-Oxley Act: A law in the United States that sets standards for all publicly traded companies.
Executive Officers: People who are responsible for managing a company and making decisions on behalf of the board of directors.
Minority Shareholders: Shareholders who own a smaller percentage of a company’s shares than the majority shareholders.

Contents

• Overview of Corporate Governance
• Understanding the purpose and value of corporate governance
• Familiarizing yourself with corporate governance laws and regulations
• Understanding the Different Types of Corporate Governance Documents
• Becoming familiar with the different types of corporate governance documents and their purpose
• Examining examples of corporate governance documents
• Assessing Your Needs for Corporate Governance Documents
• Analyzing your organization’s current corporate governance structure
• Determining which corporate governance documents are necessary for your organization
• Drafting Your Corporate Governance Documents
• Planning the structure of your corporate governance documents
• Writing the content of your corporate governance documents
• Acquiring legal counsel for review and approval
• Implementing and Maintaining Your Corporate Governance Documents
• Establishing procedures for the implementation and maintenance of your corporate governance documents
• Training the organization’s employees on the corporate governance procedures
• Monitoring and Adapting to Changes in Corporate Governance
• Staying up to date on changes in corporate governance laws and regulations
• Evaluating your corporate governance documents to ensure they remain compliant
• Other Considerations for Corporate Governance Documents
• Designating a corporate governance officer
• Establishing a corporate governance committee
• Maintaining corporate governance records
• Scheduling periodic corporate governance reviews

Get started

Overview of Corporate Governance

• Research and define the roles of the Board of Directors, shareholders, and other stakeholders
• Understand the purpose of corporate governance and how it relates to the success of the company
• Familiarize yourself with corporate governance regulations and industry best practices
• Create a list of corporate governance documents needed for the company

Once you have completed this step, you will have a solid understanding of the purpose of corporate governance, its goals, and the documents required to effectively implement it.

Understanding the purpose and value of corporate governance

• Understand the different roles and responsibilities of the board of directors, management and shareholders
• Learn the importance of corporate governance and the value it adds to an organization
• Explore the legal and regulatory framework that governs corporate governance
• Recognize how corporate governance can help a company manage risks and maximize long-term shareholder value
• Research different corporate governance models and best practices
• When you have a good understanding of the purpose and value of corporate governance and have familiarized yourself with the legal and regulatory framework, you can move on to the next step.

Familiarizing yourself with corporate governance laws and regulations

• Read up on the corporate governance laws and regulations in your area
• Take a look at the official websites of the regulatory bodies in your area
• Check out legal databases and other resources related to corporate governance
• Research case law related to corporate governance
• Ask a lawyer for help understanding corporate governance regulations and laws
• When you feel confident that you understand the corporate governance laws and regulations in your area, you can move on to the next step.

Understanding the Different Types of Corporate Governance Documents

• Research and review the types of corporate governance documents typically used, such as bylaws, shareholder agreements and operating agreements.
• Understand the purpose of each corporate governance document and how they are used in the corporate structure.
• Become familiar with the contents of each type of document, such as the roles, responsibilities and liabilities of directors, shareholders and officers.
• Take note of any special provisions or amendments to each document and how they affect the corporate structure.
• Make sure you fully understand the different types of corporate governance documents before drafting them.

When you can check this off your list and move to the next step:

• When you have a comprehensive understanding of the different types of corporate governance documents and their purpose, you can move on to the next step in the guide.

Becoming familiar with the different types of corporate governance documents and their purpose

• Research and read up on the various types of corporate governance documents, such as articles of incorporation, bylaws, board resolutions, shareholder agreements, and more.
• Look up the various functions and purpose of these documents and what they are used for.
• Make sure to familiarize yourself with the terminology used in the documents, such as ““shareholder,”” ““director,”” and ““board of directors.””
• Once you feel confident in your understanding of the different types of corporate governance documents and their purpose, you can move on to the next step.

Examining examples of corporate governance documents

• Research and identify examples of corporate governance documents from other companies
• Familiarize yourself with the language and structure of different corporate governance documents
• Read through the different examples and take notes on any elements or language that could be useful to you in drafting your own documents
• Identify any potential issues or areas of improvement in the different examples
• When you feel like you have a good understanding of the different corporate governance documents, you can move on to assessing your needs for corporate governance documents.

Assessing Your Needs for Corporate Governance Documents

• Identify the corporate governance documents that are required for your organization
• Research the legal requirements in the state and country where your organization is located
• Consult with an attorney or qualified corporate governance specialist to ensure compliance
• Create an inventory of the corporate governance documents that need to be drafted
• Assess the current corporate governance documents of your organization and identify any gaps
• When you have identified the necessary documents, the requirements needed and any gaps, you can move on to the next step.

Analyzing your organization’s current corporate governance structure

• Gather information about the company’s current corporate governance structure, including any existing bylaws, board resolutions, and other governing documents
• Review the current structure to identify any potential conflicts of interest, gaps in coverage, or areas of potential improvement
• Analyze the company’s structure to ensure it is in compliance with applicable laws
• Use the information identified in the analysis to determine which corporate governance documents are necessary for the organization

When you have gathered and analyzed the necessary information on the company’s corporate governance structure, you can move on to the next step (### Determining which corporate governance documents are necessary for your organization).

Determining which corporate governance documents are necessary for your organization

• Research the documents that are necessary for your organization depending on its size, type, and legal structure
• Consult with legal professionals to identify any additional corporate governance documents that may be relevant
• Compile a list of the corporate governance documents you will need to draft
• You will know you can complete the step when you have a list of the corporate governance documents that you will need to draft.

Drafting Your Corporate Governance Documents

• Research and understand the legal requirements and best practices related to the necessary corporate governance documents for your organization.
• Draft the corporate governance documents in accordance with the legal requirements and best practices.
• Review the documents to make sure they are accurate and complete.
• Have a knowledgeable person review the documents to ensure accuracy.
• Make sure all the documents are in compliance with applicable laws.
• Once the documents have been reviewed and revised as needed, you can check this off your list and move on to the next step.

Planning the structure of your corporate governance documents

• Outline the documents you need to draft and the overall structure of each
• Create an outline for each document to serve as a roadmap when drafting
• Think about the order of documents and how the documents will interact with one another
• Identify what topics you need to cover in each document and the flow of information
• When you have a plan for the structure of the documents, you are ready to move on to writing the content of the documents.

Writing the content of your corporate governance documents

• Prepare a document containing the articles of association and the bylaws of the company
• Outline the roles and responsibilities of the board of directors and executive officers
• Describe the procedures for meetings and handling of voting
• Define the number, composition and term of directors
• Establish procedures for the appointment of officers
• Describe the structure of management and the board of directors
• Outline the rules for the appointment and removal of directors
• Develop guidelines for financial reporting
• Describe the process for amending the bylaws
• Specify the process for resolving disputes

When you have completed the writing process, ensure that the corporate governance documents are properly formatted and all the necessary information is included. You should then be ready to have the documents reviewed and approved by a legal counsel.

Acquiring legal counsel for review and approval

• Determine the extent of legal counsel necessary for your corporate governance documents
• Research and contact a qualified lawyer or law firm to review and approve the documents
• Provide the lawyer or law firm with all necessary information to ensure a thorough review
• Receive feedback from the lawyer or law firm to make any necessary changes
• Reach a consensus with the lawyer or law firm on final corporate governance documents
• Get the lawyer or law firm to sign off on the documents
• Make sure the lawyer or law firm understands their duties and responsibilities under the documents

You’ll know when you can check this step off your list when the lawyer or law firm has reviewed, approved and signed off on the documents.

Implementing and Maintaining Your Corporate Governance Documents

• Create a timeline to ensure that your corporate governance documents are regularly reviewed and updated according to applicable laws, regulations, and best practices
• Develop and implement procedures for the review and maintenance of these documents
• Ensure that the appropriate stakeholders are consulted and involved in the review and maintenance of the corporate governance documents
• Ensure that any changes are documented and communicated to all relevant stakeholders
• Review the documents annually or whenever there are changes to the company’s structure, operations, or governance

Once these steps have been completed, you can check this off your list and move on to the next step of establishing procedures for the implementation and maintenance of your corporate governance documents.

Establishing procedures for the implementation and maintenance of your corporate governance documents

• Develop a written policy manual that states the roles and responsibilities of each member of the Board of Directors and senior management
• Establish a process for regularly reviewing and updating the policy manual
• Ensure that all Board members and senior managers understand their roles and responsibilities as outlined in the manual
• Establish a procedure for members of the Board of Directors and senior management to report any potential conflict of interest
• Develop a procedure for the Board of Directors to review and approve any changes to the policy manual
• Create a procedure for the Board of Directors and senior management to report any compliance violations
• Establish a process for the Board of Directors to review and approve any changes to the corporate governance documents

Once you have established these procedures for the implementation and maintenance of your corporate governance documents, you can check this step off your list and move on to the next step.

Training the organization’s employees on the corporate governance procedures

• Identify the key personnel within the organization who need to be trained on the corporate governance procedures
• Develop a comprehensive training program outlining the corporate governance procedures and expectations
• Deliver the training program to the identified personnel
• Ensure that the personnel understand and are able to comply with the corporate governance procedures
• Monitor the personnel to ensure that they are adhering to the corporate governance procedures
• Obtain feedback from the personnel regarding the training program and the corporate governance procedures
• Record the personnel’s feedback and adjust the training program and corporate governance procedures accordingly

How you’ll know when you can check this off your list and move on to the next step:
Once the personnel have been trained on the corporate governance procedures and have successfully complied with them for an acceptable period of time, you can move on to the next step of monitoring and adapting to changes in corporate governance.

Monitoring and Adapting to Changes in Corporate Governance

• Take the time to review current corporate governance laws and regulations to ensure your organization is compliant.
• Monitor the corporate governance landscape to stay on top of any changes that may affect your organization.
• Consider implementing an internal reporting system for employees to report any potential issues related to corporate governance.
• Develop an internal policy for staying up to date on corporate governance changes and regulations.
• Create a plan for regularly reviewing and updating corporate governance documents.
• Establish a timeline for when to review and update corporate governance documents.

Once you have completed the steps above, you will have successfully established a system for monitoring and adapting to changes in corporate governance.

Staying up to date on changes in corporate governance laws and regulations

• Review any changes to corporate governance laws and regulations in the state you are operating in
• Subscribe to email alerts on any changes to corporate governance laws and regulations
• Set up Google alerts for any news related to your industry’s corporate governance regulations
• Attend trade shows or conferences related to corporate governance to stay informed
• You will know you have completed this step when you have reviewed any changes to corporate governance laws and regulations in the state you are operating in, subscribed to email alerts, set up Google alerts, and attended relevant trade shows and conferences.

Evaluating your corporate governance documents to ensure they remain compliant

• Review the existing corporate governance documents to determine if they are still compliant with the current laws and regulations
• Consult with a lawyer to ensure the documents are still compliant
• Consider the current business strategy, operations, and structure and update the documents accordingly
• Make sure to include all required elements in the documents
• Test the documents for clarity and accuracy
• When you have confirmed that the documents are compliant and up-to-date, you can move on to the next step of considering other considerations for corporate governance documents.

Other Considerations for Corporate Governance Documents

• Consider whether you need a corporate governance manual or other documents for your company
• Research and review the applicable laws and regulations that might apply to your corporate governance documents
• Consider whether additional documents or policies are necessary to provide additional guidance or direction
• Make any changes to the corporate governance documents to ensure that they remain compliant
• Make sure you have a system in place to track any changes in the corporate governance documents
• Make sure to communicate changes in the corporate governance documents to all relevant stakeholders
• Make sure to review and update the corporate governance documents on a regular basis

Once you have considered all of the above points, you should have a complete set of corporate governance documents. You can then move on to the next step of designating a corporate governance officer.

Designating a corporate governance officer

• Identify a corporate governance officer to ensure compliance with corporate governance guidelines
• Determine the corporate governance officer’s responsibilities, such as overseeing the implementation of corporate governance policies, procedures, and guidelines and monitoring compliance with them
• Draft a resolution to appoint the corporate governance officer
• Ensure that the corporate governance officer is familiar and competent with the company’s corporate governance policies, procedures, and guidelines

Once all these steps are completed, you can check off the step and move on to the next step: Establishing a corporate governance committee.

Establishing a corporate governance committee

• Identify members of the corporate governance committee
• Ensure that the committee includes members with different levels of expertise, such as legal, accounting, finance and human resources professionals
• Appoint a committee chair and establish the committee’s rules of operation
• Determine the committee’s duties and responsibilities
• Establish the committee’s reporting structure
• You’ll know that you can check this off your list and move on to the next step once you have identified the members of the corporate governance committee, ensured that the committee includes members with different levels of expertise, appointed a committee chair and established the committee’s rules of operation, and determined the committee’s duties and responsibilities.

Maintaining corporate governance records

• Create a central repository for all corporate governance documents
• Ensure all documents are properly labeled so that they can be easily retrieved
• Store physical copies in a safe and secure location
• Establish a system for tracking changes and updates to corporate governance documents
• Create a timeline for regular reviews of corporate governance documents
• Check off this step when the central repository is established and all documents are properly labeled, stored and tracked.

Scheduling periodic corporate governance reviews

• Set a timeline for when corporate governance documents need to be reviewed. This timeline should be determined based on the needs of the company, such as size, complexity, and ever-changing regulations.
• Put together a list of corporate governance documents that need to be reviewed on a regular basis. This list should include the company’s bylaws, financial statement disclosures, and any other related documents.
• Create a checklist of the items that need to be reviewed in each document. This should include the content, accuracy, and legal compliance of each document.
• Assign the task of reviewing the documents to a qualified individual or team. This should include an understanding of the documents and the process for updating them.
• Schedule an annual meeting to review the documents and ensure they are up to date. This should include an evaluation of the documents and any changes that need to be made.
• Once the documents have been reviewed and updated, document the changes and store the updated documents in a secure location.
• When the documents have been updated and stored, the step of scheduling periodic corporate governance reviews will be complete.

FAQ:

Q: Is there a difference between Corporate Governance documents in the UK and USA?

Asked by Abigail on 3rd April 2022.
A: Yes, there is a difference between Corporate Governance documents in the UK and USA. Generally, the UK approach to Corporate Governance is more hands-off than the US model, which is more prescriptive. In the US, Corporate Governance documents are more detailed and precise in their guidance on a corporation’s operations. For example, in the UK, there may be a board of directors with roles and responsibilities specified in a document such as a memorandum of understanding. In the US, a board of directors typically has more defined roles and responsibilities, such as establishing policies and procedures that must be followed by all members of the organization. Additionally, Corporate Governance documents in the US often include specific rules or regulations that must be followed in order to maintain compliance with state or federal laws.

Q: Do Corporate Governance documents need to be updated regularly?

Asked by Scott on 4th June 2022.
A: Yes, Corporate Governance documents should be updated regularly in order to stay up-to-date with changes in the law and industry standards. As new regulations are passed or existing regulations are amended, it is important for corporations to stay abreast of these changes in order to remain compliant. Additionally, as new technologies emerge or industry standards change, it is important for corporations to update their documents accordingly in order to remain competitive. It is also important for companies to review their documents periodically to ensure that all policies and procedures outlined within them are still relevant and up-to-date.

Q: What specific topics should I cover when drafting Corporate Governance documents?

Asked by Tyler on 30th September 2022.
A: When drafting Corporate Governance documents it is important to cover a variety of topics including roles and responsibilities of directors, management structure, shareholder rights and privileges, board composition and size requirements, voting and decision-making processes, financial controls, conflict of interest policies and procedures and any applicable laws or regulations pertaining to the corporation’s specific industry or sector. Additionally, it is important for organizations to consider their specific needs when drafting these documents as certain topics may need to be addressed more specifically based on an organization’s particular situation.

Q: Is there any overlap between EU and UK Corporate Governance documents?

Asked by Emma on 2nd November 2022.
A: Yes, there is some overlap between EU and UK Corporate Governance documents as they both adhere to similar principles of corporate governance. The EU generally follows a ““comply or explain”” approach which requires companies to either comply with certain recommendations surrounding corporate governance or provide an explanation as to why they have not done so. This approach is similar to that taken by many UK companies as well who often provide an explanation where they are not able to comply with certain recommendations outlined in corporate governance codes or regulations. Additionally, both countries often have similar provisions regarding shareholder rights, board composition and size requirements as well as decision-making processes which further highlights the similarities between them when it comes to corporate governance documents.

Q: Can I draft my own Corporate Governance documents without help from professionals?

Asked by Benjamin on 4th December 2022.
A: It is possible for individuals who have expertise in law and corporate governance principles to draft their own Corporate Governance documents without help from professionals. However, it is important to note that there may be legal implications if these documents are not drafted properly so it is always recommended that individuals seek professional advice when creating these documents for their organization. Additionally, drafting your own Corporate Governance documents can be time consuming as they must address a variety of topics such as roles and responsibilities of directors, management structure, shareholder rights and privileges, board composition and size requirements etc., so it may be beneficial for individuals who lack expertise in this area to seek assistance from professionals who can provide guidance throughout the process.

Example dispute

Suing a Company for Breach of Corporate Governance

• Determine if the company has violated a specific regulation or law, such as the Sarbanes-Oxley Act, The Securities Exchange Act of 1934, The Foreign Corrupt Practices Act, or other relevant legislation.
• Gather evidence in the form of documents, emails, and other electronic communications that demonstrate the company’s breach of corporate governance.
• File a complaint with the relevant court and serve it to the company.
• Negotiate a settlement that includes monetary damages for the plaintiff.
• If necessary, take the case to trial. At trial, the plaintiff must prove that the company breached its corporate governance duties, and the plaintiff must demonstrate how the breach caused the plaintiff’s damages.
• Calculate the damages suffered by the plaintiff. This could include lost wages, medical expenses, and other costs.

Templates available (free to use)

Climate Related Corporate Governance Issues
Corporate Governance Agreement
Corporate Governance Reforms
Nominating Corporate Governance Committee Charter
Nominating Corporate Governance Committee Self Evaluation
Quoted Companies Climate Related Corporate Governance Issues
Unquoted Companies Climate Related Corporate Governance Issues

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