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 South Dakota, corporate governance is primarily governed by the South Dakota Business Corporation Act, which outlines the roles, duties, and responsibilities of corporate directors and officers. This framework ensures that corporations operate with a degree of accountability and transparency, particularly in financial reporting and disclosures. Companies must also adhere to federal laws such as the Sarbanes-Oxley Act for financial integrity, the Dodd-Frank Act for financial reforms, and securities laws enforced by the SEC. Additionally, corporations in South Dakota 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 risk management, strategic planning, succession planning, and executive compensation. The board of directors is tasked with overseeing these governance aspects, ensuring that the corporation adheres to both internal and external regulations, and that it operates in the best interests of the shareholders and stakeholders.