Corporate Governance Issues for Large Privately-held Companies: Risks and Recommendations
- Topics:
- Investor Relations
- Source:
- Thelen Reid & Priest
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Overview: The duties and obligations of the officers and directors of large privately-held companies will be significantly affected by the recent corporate governance reforms. While these reforms generally apply to companies with publicly traded securities, the changing norms of corporate conduct will soon affect all companies with a significant number of non-management shareholders. In summary, large privately-held companies should understand both the spirit and rationale behind the new corporate governance regime for publicly traded companies, realize that it is very likely that similar standards of behavior - and possibly penalties - will shortly apply to privately-held companies and adapt their corporate governance structures and practices accordingly. State corporate law and principles of fiduciary duty do not distinguish between publicly-held and privately-owned companies. As state corporate laws begin to reflect the important changes in expectations for company boards and managements, including changes that will inevitably affect application of the business judgment rule, privately-held companies would be wise to adjust their corporate governance policies and procedures.
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Format: HTML | Date: Sep 2002 | Pages: 1
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