The Corporate Governance Review: United States (2nd Ed.)

The sources of corporate governance law and regulation in the United States are state corporate law (predominantly Delaware, in which over half of all US publicly traded corporations are incorporated); the federal 1933 Securities Act and 1934 Securities Exchange Act and regulations of the Securities and Exchange Commission (‘the SEC’) under those Acts; stock exchange listing rules (predominantly the New York Stock Exchange (‘the NYSE’) and the NASDAQ); proxy advisory firms (predominantly Institutional Shareholder Services (‘ISS’)) and the influence those proxy advisers have on the institutional investor community; and federal statutes in regard to particular areas of corporate practice (for example, the Hart-Scott-Rodino Act requiring antitrust pre-clearance of most corporate acquisitions, the Federal Reserve and other federal and state agencies with respect to banks and other financial institutions, the Foreign Corrupt Practices Act prohibiting bribery and other corrupt practices in other countries by domestic entities and certain foreign issuers of securities). Because of the federal system of US law, these different sources of law are not always harmonized and corporations are often subject to different obligations to federal and state governments, as well as regulators at each level of government. This mosaic of rules and regulations, and the various authorities and mechanisms by which they are implemented and enforced, make for an environment of frequent change and evolution.