A Spatial Representation of Delaware-Washington Interaction in Corporate Lawmaking
18 Pages Posted: 10 Jul 2012 Last revised: 7 Jan 2015
Date Written: July 10, 2012
Delaware and Washington interact in making corporate law. In prior work I showed how Delaware corporate law can be, and often is, confined by federal action. Sometimes Washington acts and preempts the field, constitutionally or functionally. Sometimes Delaware tilts toward or follows Washington opinion, even if that opinion does not square perfectly with its own consensus view of the best way to proceed. And sometimes Delaware affects Washington activity, effectively coopting a busy Washington from acting in ways that do not accord with Delaware’s major constituents’ view of best practice. Delaware influences Washington decision-making when Delaware is positioned between its own ultimate preferences (determined in part by its primary constituencies’ consensus position) and Washington’s prevailing preferences. Since Congress has a long and complex agenda, if key players in Washington become satisfied that the Delaware legal outputs are close enough to their own preferences, Delaware can induce Washington to desist from going further.
At the Columbia Symposium on Delaware corporate lawmaking, I presented a straight-forward spatial model paralleling spatial models that political scientists have used to illustrate other contexts of government jurisdictional interaction. In this article, I describe and set forth that model to illustrate Delaware-Washington interaction in the last decade’s making of proxy access rules.
Keywords: Shareholder voting, proxy contest, Delaware corporate law, jurisdictional competition, federalism, securities law, public choice
JEL Classification: D21, G3, G18, G28, G30, G34, G38, H73, K4, K20, K22, K42, L21
Suggested Citation: Suggested Citation