Corporate governance is a framework of rules and regulations that governs the leadership, organization, and management of a company. In addition to compliance with laws, rules, and regulations, corporate governance may include compliance with the company’s corporate charter, bylaws, formal policies, customs, and internal processes. The company’s board of directors often directs its corporate governance over a broad range of functions, including financial reporting and disclosures, securities laws, risk management, operating plans and budgets, strategic planning, succession planning, crises management, internal controls, internal audits, preventing foreign corrupt business practices, and executive compensation.

In Alabama, corporate governance is primarily governed by the Alabama Business Corporation Law, which sets forth the framework for the formation, operation, and dissolution of corporations within the state. This includes regulations on the roles and responsibilities of the board of directors, shareholder rights, and the maintenance of corporate records. Companies must also adhere to federal laws such as the Sarbanes-Oxley Act for financial reporting and disclosures, the Dodd-Frank Act for financial reforms and consumer protection, and the Foreign Corrupt Practices Act to prevent corruption in international business practices. Additionally, corporations in Alabama must comply with their own articles of incorporation, bylaws, and any internal policies they have established. These documents and policies often cover areas such as strategic planning, risk management, succession planning, and executive compensation. The board of directors is tasked with overseeing these various aspects of corporate governance to ensure that the company operates in a legal, ethical, and efficient manner.