Strong governance and compliance protect a company’s reputation, reduce exposure to regulatory enforcement and litigation, and support operational continuity. Well-crafted policies and accurate corporate records make it easier to attract investment, complete transactions, and manage leadership transitions while demonstrating to stakeholders that the business is managed with transparency and accountability.
Clear governance documents and regular reporting give boards the information they need to make timely, well-reasoned decisions. When roles and procedures are defined, meetings are more productive, responsibilities are transparent, and the board can focus on strategy rather than administrative disputes.
Hatcher Legal approaches governance work with a blend of transactional and litigation experience to help businesses reduce risk and improve operations. Our lawyers craft practical governance documents and implement compliance systems designed to fit each company’s size, industry, and long-term objectives.
We recommend scheduled compliance reviews to test controls, verify recordkeeping, and update policies in light of legal or operational changes. Regular reviews identify issues early and ensure policies remain current with regulatory expectations and business needs.
Corporate governance is the system of rules, practices, and processes by which a company is directed and managed. It covers the roles and responsibilities of the board and officers, decision-making procedures, and mechanisms for accountability and transparency that help the company meet legal obligations and pursue strategic objectives. Good governance matters because it reduces legal and operational risk, supports investor and stakeholder confidence, and ensures the company can demonstrate consistent decision-making and recordkeeping during transactions, audits, or disputes, making operations smoother and more predictable.
Updating bylaws begins with reviewing the current provisions to identify necessary changes, drafting proposed amendments, and following the amendment procedure specified in the bylaws or articles of incorporation. Proposed changes are typically approved by the board and, if required, by the shareholders in accordance with governing documents and statutory rules. After approval, resolutions should be recorded in the minutes, updated documents should be filed if necessary with the Virginia State Corporation Commission, and copies provided to key stakeholders to ensure consistent implementation across company operations.
A company should adopt a formal compliance program when it faces regulatory oversight, handles sensitive data, operates across multiple jurisdictions, or intends to seek outside investment. A formal program becomes especially important when the business’s activities expose it to legal or reputational risk that can be managed with policies, monitoring, and reporting. Key components include written policies, training for staff and directors, confidential reporting channels, documented investigations and remediation processes, and periodic reviews to ensure the program remains effective as laws and business activities evolve.
Common governance pitfalls include unclear division of authority between the board and management, inconsistent or missing meeting minutes, failure to follow bylaws or shareholder agreements, and inadequate conflict-of-interest procedures. These gaps can lead to disputes, liability, and difficulties in transactions or regulatory reviews. Avoiding these pitfalls requires regular document reviews, consistent recordkeeping, clear role definitions, and routine governance practices such as scheduled meetings, timely filings, and transparent decision-making processes to maintain legal compliance and operational clarity.
Governance plays a central role in mergers and acquisitions because acquirers and investors closely review corporate documents, minutes, and compliance history during due diligence. Strong governance reduces transaction risk by showing consistent approvals, accurate records, and resolved disputes, which makes the company more attractive and can improve deal terms. Poor governance can delay or derail transactions, prompt price adjustments, or require negotiated protections. Addressing governance issues before a sale or financing—by updating documents and rectifying recordkeeping gaps—facilitates smoother negotiations and clearer valuation outcomes.
Board composition should align with the company’s needs, including a balance of operational knowledge, financial literacy, industry insight, and independent perspectives. Directors should be capable of overseeing strategy, risk, and management performance while acting in the company’s best interests and avoiding conflicts of interest. Selection considerations include relevant experience, availability, commitment to governance responsibilities, and the ability to work constructively with other directors and management. Formalizing expectations through director agreements and orientation helps ensure productive participation and accountability.
Virginia corporations should maintain accurate articles, bylaws, shareholder records, a stock ledger, meeting minutes, officer and director lists, and copies of material contracts and resolutions. These records support statutory compliance, clarify ownership and authority, and serve as the documentary basis for corporate actions and transactions. Maintaining an organized record retention policy and ensuring timely updates following meetings, officer appointments, share transfers, and filings helps the company meet Virginia State Corporation Commission requirements and simplifies audits and due diligence processes.
Preparation for a regulatory inquiry starts with assembling corporate records, minutes, policies, and any communications relevant to the inquiry. Quick organization and a clear record of actions demonstrate the company’s willingness to cooperate and its commitment to compliance, which can influence the outcome of an inquiry. Engaging counsel early helps manage communications, preserve privileges where appropriate, and develop a response plan that includes documenting corrective steps when issues are identified. Proactive remediation and transparent cooperation often mitigate regulatory consequences.
Shareholder agreements govern rights and obligations among owners, addressing transfer restrictions, buy-sell provisions, voting arrangements, and dispute resolution mechanisms. These agreements complement bylaws by providing clarity on ownership changes, capital contributions, and exit strategies to reduce uncertainty and conflicts among shareholders. Well-drafted agreements facilitate smoother governance by setting expectations for control and liquidity, protecting minority or majority interests as negotiated, and providing procedures for resolving disagreements without resorting to costly litigation, thereby preserving business value.
Board meeting frequency depends on the company’s size, complexity, and stage, but regular, scheduled meetings with properly documented minutes are essential. Many boards meet quarterly, with additional sessions for strategic planning or major transactions. Keeping concise, accurate minutes that record attendance, motions, votes, and key discussions supports accountability and legal compliance. Minutes should be approved promptly and stored with corporate records. Regular meeting rhythms and consistent minute-taking provide a reliable governance history that benefits decision-making and is crucial during audits, financing rounds, or disputes.
