For most of the modern era, Delaware has been the default home of American corporate law. That dominance is familiar, but it is also puzzling. Delaware does not offer corporations a simple code of bright-line rules. It offers fiduciary standards, judicial review, and a continuing stream of case law. Other states have often promised more predictable statutes that limit litigation and protect managerial discretion. Yet public companies continued to choose Delaware in large numbers.

The current debate over DExit makes this puzzle newly important. High-profile firms have explored or completed moves to states such as Nevada and Texas, often arguing that Delaware law has become too uncertain or too intrusive. To assess that critique, it helps to ask why firms chose Delaware in the first place.

(more…)