The Handbook of Board Governance, 2nd Edition

54Private Versus Public Company Governance: Top-13 Questions for Board Members to Consider

Carol Nolan Drake

Founder and CEO, Carlow Consulting, LLC; and Former Chief External Affairs Officer and Corporate Governance Manager, Ohio Public Employees Retirement System

Sally J. Curley IRC

CEO, Curley Global IR, LLC (CGIR)

Introduction

Today's entrepreneurs are admired for their ingenuity and extraordinary work ethic as they bring ideas to life through distinct corporate ventures. The initial corporate formations may start out as private companies where founders are consumed with day-to-day activities as they work to raise capital. The decision to establish a company can be challenging, with one of the key initial steps—in additional to fundraising—being to attract and retain talent. No one else will have as much skin in the game as the entrepreneur until major investors enter the picture.

While the concept of corporate governance is not new, formal, good governance is relatively new in the context of history. Outside the United States, three governance models are typically used—German, Nordic, and Japanese.¹ In the United States, we employ a fourth model—Anglo-American—with a one-tiered board of directors.

The first companies formed were those providing goods and services such as banking and textiles, as America prospered. In fact, it is believed that the concept of incorporating accelerated in the United States because those entities were relatively easy to create. Most states ...