The Delaware Courts’ Increasingly Laissez Faire Approach To Directorial Oversight

n a wave of recent cases, judges in Delaware, the state that has pioneered the nation’s corporate laws but holds less than one-third of one percent of the U.S. population, have issued opinions that dramatically curtail the rights of millions of shareholders across the country. For decades, legal scholars have opined that Delaware’s corporate-friendly laws attract droves of corporations with no actual ties to the state to incorporate there, to the detriment of investors. Several recent opinions regarding the effect of so-called shareholder “ratification” further solidify their argument that shareholders’ rights have hit rock-bottom under the stewardship of the Delaware courts, and that the time has come for legislative intervention, including federal regulation of directors’ fiduciary obligations.