Delaware’s Disclosure: Moving the Line of Federal-State Corporate Regulation

Delaware’s dominance of the market for incorporations provokes recurring academic examination of how such a small state could be so successful. The symposium in this issue offers differing views as to whether indeterminacy poses a risk to Delaware in its competition with other states. This Article develops in Part I how the indeterminacy gap between Delaware and competing states disappears as to the core fiduci-ary duty questions that provoke most corporate law litigation. Part II moves beyond the indeterminacy theme to posit that Delaware’s competi-tion with the other forty-nine states is of secondary importance to the main event of corporate governance: the shrinking role of all states vis-à-vis the federal government. Within this frame, the Article develops a sur-prising growth area for Delaware law in its use of disclosure, along the primary domain of the federal regulators. Recent Delaware cases have effectively linked disclosure obligations (borrowed extensively from fed-eral law) with substantive protection of the space for shareholder deci-sions free of director domination. Although federal regulators have sometimes attempted a similar linkage, absent new federal statutes, only Delaware can effectively combine both methods of protection. This link-age means that Delaware courts will remain at the front line of contested corporate governance contests.

The full text of this Symposium is available to download as a PDF.