Corporate law treats all directors alike; the same standards apply to all directors, regardless of the size, maturity, or other characteristics of the companies on whose boards they serve. All directors have the same fiduciary duties of due care and loyalty, are protected by the business judgment rule, and are expected to engage in rigorous oversight. However, all companies are not created equal. Size and maturity are among several significant differentiating factors among companies. The term “best practice” is often applied to corporate governance, but to the extent that the term suggests that there is just one way of doing things, it’s of questionable value. Each company is different in terms of its history, culture, and other qualities. In particular, practices that work for larger, more mature companies may not work well (or at all) for smaller, younger companies. Accordingly, boards should adjust their practices and procedures to achieve their goals.

This publication was released by our US firm.

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