23. What state and federal laws primarily contribute to corporate governance?
Regulation of corporate governance practices is a mixture of state and federal law and organizational requirements. Below is a list of the primary state and federal laws and stock exchange rules contributing to corporate governance:
• state-specific corporate laws (particularly Delaware law and Model Business Corporation Act states),
• the Securities Exchange Act of 1934 (’34 Act) and SEC Rules,
• the Sarbanes-Oxley Act of 2002 (SOX)
• the Foreign Corrupt Practices Act (FCPA)
• the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank),
• the listing standards of the NYSE and NASDAQ
• the advisor rules from Proxy Advisory Firms.
Each of the above sources of regulation are discussed in detail below.
• Discussion: If corporate entities exist by virtue of state law, why do you think that there are so many federal laws and private organization standards concerning corporate governance?