I know very little about Nevada or Texas but they make me happy these days. Why? I have enjoyed reading Delaware cases all these years and talking about how the state’s triumph is about inter-jurisdictional competition. Well, now I get to see some challenges to Delaware. Competition is great.
Professor Carliss Chatman recently posted the following on X:
If only one state has the competence to define and monitor public corporations, why not federalize? Or, is what we’re really seeing is a desire to maintain monopoly power combined with fear of losing expert market share if states like TX and NV get a cut?
Well, I live in Australia where corporate law is federal (in a manner of speaking anyway – states have given away power in this regard) and none of us are happy with the state of corporate law here (“Oscar Wilde would have regarded our modern Corporations Law not only as uneatable, but also indigestible and incomprehensible”), particularly with the legislation in question. Would things be better if there was inter-jurisdictional competition? We’ll never know because every country is different but we can at least look appreciatively at the one place where there is inter-jurisdictional competition in this regard. That was a little theoretical in the recent past because of Delaware’s clear success but it is good to see some competition.
As Professor Zohar Goshen has said in an interview recently, Tesla’s Texas move may be because of other considerations than the corporate law of Texas, but perhaps this will give Texas the incentive to make an effort. It already seems to be, what with a business court being set up, etc.
The future looks very attractive for corporate law people who like competition.
THE HITCHHIKER'S GUIDE TO CORPORATE GOVERNANCE 