TheCorporateCounsel.net

Over on LinkedIn, Prof. Ann Lipton has a post in which she cites a Reuters’ article on how recent moves by the SEC’s Acting Chair Mark Uyeda have shifted power from investors to the board. She says that the newly proposed DGCL amendments would amplify this shift:

The proposed changes to Delaware law represent a hard swing allocating power away from shareholders (as litigants and information seekers) to corporate insiders. In the past, Delaware has justified changes of this sort by pointing out that, unlike 40 years ago, today’s shareholder base is largely institutional and sophisticated.

But the incoming SEC has already made some opening dramatic moves to undercut the power of institutional investors (the changes to 13D reporting take my breath away), and I expect many more on the horizon, from jawboning about ESG votes to limiting proxy advisors.

So we’re seeing the same moves at the federal and state levels, namely, a recalibration to put relatively unlimited discretion back in the hands of corporate insiders.

The proposed DGCL amendments have prompted a flood of commentary from academics & practitioners, but if you’re looking to understand the background and implications of the amendments, you need to spend some time with this 21-page deep dive from Morris Nichols. (Also check out the materials I referenced in my DealLawyers.com blog this morning.)

– John Jenkins