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 North Carolina, corporate governance is primarily governed by the North Carolina General Statutes, particularly Chapter 55, known as the North Carolina Business Corporation Act. This Act outlines the roles, duties, and responsibilities of corporate directors and officers, the conduct of shareholder meetings, issuance of shares, maintenance of corporate records, and other aspects of corporate governance. Companies must also adhere to their own articles of incorporation, bylaws, and any shareholder agreements. Additionally, corporations that are publicly traded must comply with federal laws, including the Securities Exchange Act of 1934, which regulates disclosures and financial reporting, and the Sarbanes-Oxley Act of 2002, which imposes stricter controls on corporate governance to protect investors from fraudulent activities. Corporate governance in North Carolina also encompasses adherence to the Dodd-Frank Wall Street Reform and Consumer Protection Act, which addresses issues such as executive compensation and risk management. Furthermore, companies engaging in international business must comply with the Foreign Corrupt Practices Act (FCPA) to prevent bribery and corruption in foreign markets. The board of directors in a North Carolina corporation is central to the governance process, overseeing the broad range of functions mentioned, ensuring that the corporation operates within the legal framework and upholds the standards of good corporate governance.