Strong governance reduces the chance of costly disputes, improves transparency for investors and lenders, supports smoother ownership transitions, and demonstrates accountability to regulators. Implementing clear policies and documentation practices makes businesses more defensible in litigation and better prepared for strategic transactions or regulatory examinations.
By proactively addressing procedural gaps, documenting decisions, and setting clear approval pathways, companies reduce the likelihood of conflicts escalating to litigation and strengthen their position when disputes occur, saving time and resources.
Hatcher Legal combines transactional and litigation experience to offer advice that balances legal protections with business realities. We help owners and boards draft durable governance documents and implement compliance programs that reduce risk and support strategic goals.
We schedule periodic reviews of governance documents and compliance practices, update policies for regulatory changes, and recommend adjustments to internal controls to address evolving risks and operational developments.
Corporate governance establishes the rules and structures for decision-making, accountability, and authority within a company. It defines how directors, officers, and shareholders interact, streamlines approvals, and sets procedures for meetings and voting processes to ensure decisions are documented and defensible under Virginia law. Good governance matters because it reduces ambiguity, supports investor and lender confidence, helps prevent internal disputes, and provides a clear record in regulatory examinations or litigation. Implementing and following governance processes makes businesses more resilient during transitions and transactions.
Companies should review bylaws and operating agreements after major events such as ownership changes, leadership transitions, capital raises, or when business operations materially shift. These documents should reflect current governance practices, decision-making authority, and any agreed-upon transfer or buyout procedures among owners. A periodic review every few years or when a planned transaction is anticipated helps ensure that governing instruments align with strategic objectives and meet statutory requirements, reducing the risk of disputes or procedural defects during important corporate actions.
Shareholder agreements provide contractual terms that clarify transfer restrictions, buy-sell mechanisms, valuation methods, voting rights, and dispute resolution procedures. For closely held companies, these agreements prevent unintended ownership changes and outline predictable processes for exit or succession. By addressing common owner conflicts and establishing buyout provisions in advance, shareholder agreements reduce uncertainty, preserve business continuity, and create measurable standards for enforcing rights or resolving disputes without resorting to protracted litigation.
Maintain organized minutes of board and shareholder meetings, corporate resolutions, signed governance documents, stock ledgers, contracts, and records of regulatory filings. These materials show that corporate decisions were properly authorized and that the company followed its own rules and applicable laws. Consistent document retention supports defenses in lawsuits, satisfies due diligence requests during transactions, and provides the operational transparency lenders and investors expect when evaluating a company’s legal and financial standing.
Governance counsel prepares companies for transactions by cleaning corporate records, confirming corporate authority to transact, updating governing documents, and resolving outstanding governance or compliance issues that could impede a deal. This reduces transaction risk and streamlines due diligence. Early counsel identifies and addresses title, authority, and disclosure issues, drafts necessary resolutions and consents, and ensures that shareholder and board approvals are properly documented, which helps avoid delays and preserves deal value during negotiations and closings.
Yes. Proactive governance and compliance measures reduce litigation risk by addressing procedural defects, documenting decisions, and establishing policies that limit conflicts. A robust record demonstrating adherence to governance protocols strengthens defenses if disputes arise. Addressing potential vulnerabilities early—through consistent minutes, clear authorities, and conflict policies—often prevents conflicts from escalating and gives companies better options for negotiation or alternative dispute resolution when disagreements occur.
Directors and officers have responsibilities to act in the company’s best interests, follow governing documents, disclose conflicts, and exercise reasonable care in decision-making. Their roles include adopting policies, overseeing management, and ensuring accurate records of major corporate actions. By participating in training, following meeting procedures, and documenting deliberations, board members and officers uphold governance standards, reduce uncertainty about authority, and help the company meet compliance obligations across operations and transactions.
Frequency depends on company size, industry regulation, and risk profile. Many businesses benefit from annual reviews or reviews aligned with major events such as financing, leadership changes, or regulatory updates. High-risk sectors or companies with rapid change may require more frequent audits. Regular reviews identify gaps in controls, ensure policies are current, and confirm that filings and recordkeeping practices are maintained, enabling timely remediation and reducing exposure to regulatory enforcement or transactional complications.
Common regulator red flags include missing or inconsistent corporate records, failure to follow bylaws or required approvals for transactions, undisclosed conflicts of interest, and lapses in required filings or licensing. These issues suggest weak controls and increase scrutiny during audits or investigations. Addressing recordkeeping gaps, establishing clear approval procedures, and maintaining up-to-date filings reduce the likelihood of enforcement action and help businesses present a defensible compliance posture during regulatory reviews.
Develop a written conflict-of-interest policy that requires disclosure of potential conflicts, outlines procedures for recusal, and specifies approval mechanisms when conflicts are permissible. Require periodic disclosures from directors and officers and maintain records of decisions and recusals. Implement procedures for managing disclosed conflicts, such as independent director review or outside counsel advice, and ensure that disclosures and approvals are documented in meeting minutes to create a clear record of how conflicts were addressed.
