Governance: Who Actually Decides

by bam

A cited, high-school-and-up course on corporate and organizational governance, and the sixth course in the 'How a Business Is Formed' path. It is not legal or financial advice, and it says so throughout: it teaches you what to ASK a lawyer or a governance professional, not the answer for a real company or a real investment. Course 1 taught that any entity is a bundle of four decisions, and governance was the fourth: who gets to decide? This course takes that one decision to its depth. The spine is the gap between OWNING a business and DECIDING for it. In a large company the owners are many and scattered, and the people who actually run it are few, so governance is the set of devices that keep the deciders answerable to the owners. You will learn what a board of directors is and does, how directors are elected, why independent directors and board committees exist, and the long argument over whose interests a company serves: shareholders alone, or a wider set of stakeholders. You will learn fiduciary duty, the highest obligation the law puts on a director, split into the duty of care (protected by the business judgment rule) and the duty of loyalty (which conflicts of interest test). You will see how founders concentrate control through dual-class, super-voting shares, and how other systems answer the same question differently: the German two-tier board with worker codetermination, the cooperative's one member one vote, and the nonprofit board that answers to a mission rather than to owners. The capstone asks you to read a real governance structure, say who actually decides, and find where a minority owner's protection comes from.