Recently, the Delaware General Assembly amended Delaware\u2019s corporate code to allow boards to delegate their decision-making powers to stockholders via contract. These amendments are significant because they effectively overturn a recent Delaware Chancery opinion. They\u2019re also problematic, for two reasons: (1) because they are out of step with the best reading of Delaware corporate law\u2014what I have referred to elsewhere as \u201cthe perpetual entity model\u201d of the corporation and (2) because they are inconsistent with Delaware law\u2019s tendency to eschew monetary penalties in favor of a system built on informal reputation-based sanctions and norm internalization, all of which assumes that the board is at the helm. These problems could be largely addressed by limiting the amendments\u2019 application to contracts with stockholders that either exercise control or are themselves members of the board. Otherwise, the law as written threatens to destabilize what we know about what corporations are and how corporate law works.<\/p>\n\n\n\n
To read this Essay, please click here: The<\/a> \u201cSection 122 Revolution\u201d in Delaware Corporate Law and What to Do About It<\/a><\/em>.<\/p>\n","protected":false},"excerpt":{"rendered":" Recently, the Delaware General Assembly amended Delaware\u2019s corporate code to allow boards to delegate their decision-making powers to stockholders via contract. These amendments are significant because they effectively overturn a recent Delaware Chancery opinion. They\u2019re also problematic, for two reasons: (1) because they are out of step with the best reading of Delaware corporate law\u2014what…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[26,691,13],"tags":[],"class_list":["post-4534","post","type-post","status-publish","format-standard","hentry","category-essay","category-online-volume-110","category-archives"],"acf":[],"_links":{"self":[{"href":"https:\/\/publications.lawschool.cornell.edu\/lawreview\/wp-json\/wp\/v2\/posts\/4534","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/publications.lawschool.cornell.edu\/lawreview\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/publications.lawschool.cornell.edu\/lawreview\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/publications.lawschool.cornell.edu\/lawreview\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/publications.lawschool.cornell.edu\/lawreview\/wp-json\/wp\/v2\/comments?post=4534"}],"version-history":[{"count":1,"href":"https:\/\/publications.lawschool.cornell.edu\/lawreview\/wp-json\/wp\/v2\/posts\/4534\/revisions"}],"predecessor-version":[{"id":4826,"href":"https:\/\/publications.lawschool.cornell.edu\/lawreview\/wp-json\/wp\/v2\/posts\/4534\/revisions\/4826"}],"wp:attachment":[{"href":"https:\/\/publications.lawschool.cornell.edu\/lawreview\/wp-json\/wp\/v2\/media?parent=4534"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/publications.lawschool.cornell.edu\/lawreview\/wp-json\/wp\/v2\/categories?post=4534"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/publications.lawschool.cornell.edu\/lawreview\/wp-json\/wp\/v2\/tags?post=4534"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}