Most major corporations incorporate in Delaware for, as Reuters puts it, "its stable law and well-respected courts". Supporting that stable law is voluminous case law. And because Delaware has a well-established rule of (corporate) law, investors have been happy with their corporations being incorporated there.
With certain corporations moving or threatening to move out of state, the state legislature is enticing them to stay by advancing a bipartisan bill that would significantly weaken investor protections. "The bill was not drafted by the state's bar association, which typically oversees changes to the state's corporate law." (This is an example of why some investors here are taking a closer look at how politics is affecting their portfolios.)
Reuters article (via Fidelity):
https://www.fidelity.com/news/article/top-news/202502172152RTRSNEWSCOMBINED_KCN3F304K-OUSBS_1Here's commentary by
Ann Lipton - Professor in Business Law and Entrepreneurship at Tulane Law School.
Fiduciary obligations are, like the rigidity of the corporate form itself, a type of state regulation: They are a judicially-imposed limit on exploitative conduct by managers.
But Delaware’s been eroding that form of regulation for quite some time ...
Still, fiduciary obligations seemed to make something of a comeback ...
So I suppose it was inevitable that the Delaware legislature would seek to undo that last vestige of regulation, as well as all other remainders.
https://www.businesslawprofessors.com/2025/02/delaware-decides-delaware-law-has-no-value/
