Toward a Systems Architecture in Corporate Governance

Abstract

A new and powerful systems architecture is driving corporate governance. This architecture will improve board of directors’ decision-making, strengthen compliance and risk management protocols, empower gatekeepers such as lawyers and accountants to better monitor, and enhance the social contract between business and society. The purpose of this article is to promote a systems approach to decision-making in matters of corporate governance, highlight the importance given to systems by recent Delaware courts, and present recommendations for boards of directors to optimally situate themselves within an effective organization-wide system of governance.

Keywords: Corporate Governance, Systems Thinking, Shareholder Litigation, Caremark