Investor Services

Benefits of Corporate Governance

Corporate governance refers to the system by which companies are directed and controlled.  Corporate governance is intended to increase the accountability of a company’s management to investors and to avoid corporate wrongdoing and malfeasance that can result in investor loss.  The lawyers at Hynes & Hernandez LLC have witnessed first hand how companies and their shareholders benefit from improved corporate governance.

Many instances of corporate misconduct result from a lack of adequate corporate governance.  Conversely, good corporate governance fosters fairness, transparency, and accountability to shareholders and has been shown to benefit companies and shareholders alike. For example, studies have shown that companies with poor corporate governance scores have 5-year returns that are 3.95% below the industry average, while companies with good corporate governance scores have 5-year returns that are 7.91% above the industry-adjusted average. The difference in performance between these two groups is 11.86%. Corporate Governance Study: The Correlation between Corporate Governance and Company Performance, Lawrence D. Brown, Ph.D., Distinguished Professor of Accountancy, Georgia State University and Marcus L. Caylor, Ph.D. Student, Georgia State University.

The attorneys at Hynes & Hernandez LLC have a proven track record of obtaining not only monetary recoveries for shareholders in shareholder litigation, but also significant and innovative corporate governance reforms that inure directly to the benefit of the company and its investors.