Strong governance and compliance practices protect value, improve operational efficiency, and reduce exposure to fines or litigation. They clarify roles and responsibilities for owners and managers, create transparent reporting mechanisms, and help attract investors or financing by demonstrating predictable, law-abiding operations. These measures support growth while preserving legal and financial integrity.
Comprehensive governance provides clearer escalation paths, defined responsibilities, and consistent procedures that improve risk assessment and resolution. This foundation supports better strategic decisions and reduces the chance of costly oversights by ensuring decisions are documented, informed, and aligned with company objectives and legal duties.
Hatcher Legal combines transactional knowledge with litigation awareness to craft governance and compliance solutions that are legally sound and operationally practical. Our approach balances legal protection with business needs, focusing on actions and documentation that reduce risk and support smooth decision-making.
We recommend periodic reviews of governance and compliance systems, refresh training as laws evolve, and update policies as business activities change. Ongoing monitoring ensures that controls remain effective and that records and reporting practices continue to meet legal and stakeholder expectations.
Corporate governance refers to the rules, processes, and structures by which a company is directed and controlled, focusing on relationships among the board, management, owners, and stakeholders. It establishes decision-making authority, fiduciary responsibilities, and mechanisms for accountability to support consistent, lawful operations. Compliance is the systems and practices that ensure the company adheres to applicable laws, regulations, and internal policies. While governance defines who makes decisions and how, compliance ensures those decisions and daily operations conform to legal requirements, with monitoring, reporting, and corrective measures in place.
Bylaws and shareholder agreements should be reviewed any time ownership, management, or business strategy changes significantly, such as new investors, ownership transfers, or mergers. Regular periodic reviews—at least every few years—are prudent to ensure documents reflect current practices and legal developments. Reviews should confirm that voting procedures, transfer restrictions, quorum rules, and officer powers remain aligned with business needs. Revising these documents proactively reduces the risk of disputes and supports smoother transactions when ownership changes or financing occurs.
A basic compliance program includes clear written policies, designated responsibilities for monitoring, basic internal controls for financial and operational processes, and a simple reporting mechanism for concerns. Training for key personnel and documented procedures for responding to incidents help ensure the program is effective and actionable. Small businesses benefit from proportionate measures, focusing on highest-risk areas and scalable controls. Periodic reviews and updates keep the program aligned with growth and regulatory changes, and documentation of training and controls supports good governance and preparedness for audits.
Document board decisions by maintaining detailed minutes that record the date, attendees, key deliberations, votes, and the reasoning behind major actions. Resolutions and supporting materials should be preserved with corporate records to create a clear trail that demonstrates informed decision-making and proper authorization. Consistent recordkeeping practices, including storing minutes, resolutions, and related documents in a secure, accessible location, strengthen the company’s position in disputes or regulatory reviews and help show that directors fulfilled their duties responsibly.
Internal controls should be implemented as soon as a business reaches a level of complexity where financial transactions, asset safeguarding, or regulatory obligations pose a material risk. Controls become particularly important before seeking outside investment or when the company handles third-party funds or sensitive information. Controls can be scaled to the business size and may include segregation of duties, approval thresholds, reconciliations, and regular reviews. Early adoption prevents errors, reduces fraud risk, and provides reliable information for management and potential investors.
If a regulatory agency initiates an inquiry, promptly identify the request, preserve relevant documents, and assess the scope with legal counsel. Early engagement and transparent responses that are accurate and timely help manage the process and reduce escalation risk. Follow counsel’s guidance on production, privilege, and communication. Simultaneously review internal controls related to the inquiry subject and prepare documentation that explains policies and remedial steps taken, demonstrating a responsible approach to compliance.
Good governance and compliance raise confidence among investors and buyers by showing predictable decision-making, accurate recordkeeping, and controls that limit downside risk. Clear documentation and up-to-date governance structures simplify due diligence and can lead to smoother negotiations and more favorable terms. In contrast, governance deficiencies can slow or derail transactions. Addressing governance matters early in the fundraising or sale process reduces friction and can preserve value by avoiding last-minute surprises during buyer or investor reviews.
While improvements cannot eliminate all disputes, clear governance documents, documented decision processes, and defined conflict resolution procedures significantly reduce the frequency and severity of shareholder disputes. Preventive measures clarify expectations and provide structured methods for resolving disagreements. When disputes arise, well-maintained records and formal procedures facilitate quicker resolution, often allowing mediation or negotiated settlements that preserve business value and relationships rather than protracted litigation.
Recordkeeping is foundational to governance because it preserves evidence of decisions, approvals, ownership interests, and corporate actions. Accurate minutes, contracts, shareholder records, and financial documentation support accountability and help demonstrate that duties were performed properly. Good recordkeeping also streamlines audits, due diligence, and regulatory responses. Establishing retention policies and secure storage practices ensures accessibility and protection of critical corporate information over time.
Begin by conducting a governance and compliance assessment to identify immediate gaps and priorities. Gather formation documents, bylaws, agreements, and existing policies to evaluate whether practices match written commitments and legal requirements, then prioritize quick wins alongside longer-term improvements. Engage counsel to draft or update key documents, implement basic controls, and train decision-makers. Establishing regular reviews and monitoring practices ensures that governance and compliance keep pace with business changes and regulatory expectations.
