Delaware Law Issues Update
Legal, corporate experts explore latest developments in Delaware law
8:41 a.m., Dec. 10, 2015--The third annual Delaware Law Issues Update brought together distinguished legal and corporate governance experts from around the country to discuss Delaware corporate law and governance issues essential to corporate secretaries, in-house counsel, outside counsel and governance professionals who advise boards.
Hosted by the University of Delaware’s John L. Weinberg Center for Corporate Governance and the Society of Corporate Secretaries and Governance Professionals, in partnership with the state of Delaware, the two-day conference was comprised of five panel discussions on legal and corporate governance issues, as well as a number of featured speakers.
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The speakers included Delaware Secretary of State Jeffrey W. Bullock and Chancellor Andre Bouchard and Vice Chancellor J. Travis Laster, both of the Delaware Court of Chancery.
“We’ve convened about 150 of the best minds in the corporate governance field, both as panelists and speakers and in our audience, to talk about the latest developments in Delaware corporate law and in the corporate governance field that all board advisers need to know to best position their boards in many different factual circumstances,” said Ann Mulé, associate director of the Weinberg Center.
These thought leaders included current and former members of the Delaware Supreme Court and the Delaware Court of Chancery, as well as prominent Delaware, Wall Street and plaintiffs lawyers; both activist and large institutional investors; knowledgeable corporate secretaries and general counsel; well-known proxy advisers and governance experts.
“All are here to interact, learn and teach, and all share the goal of positively improving the field of corporate governance,” Mulé said.
Hot topics in corporate governance
The conference’s first day began with an address from Laster and included three panel discussions on subjects that strongly impact today’s legal and corporate governance worlds.
Laster was introduced by Anne Foster, director, Richards, Layton and Finger. Laster spoke about three recent Delaware cases that illustrate the stability and predictability of Delaware law and also reflect the evolving nature of shareholders and the market.
“Issues Relating to Recent Shareholder Activism,” which was moderated by William Lafferty, partner, Morris, Nichols, Arsht and Tunnell LLP and included Vice Chancellor Sam Glasscock, focused on recent case law on shareholder activism as well as what companies can do to prepare in advance for activists.
The day’s next panel, “M&A and Advising the Board,” which was moderated by David Katz, partner, Wachtell, Lipton, Rosen and Katz, discussed the best ways for boards of directors to meet their fiduciary responsibilities in the context of mergers and acquisitions.
The panel also addressed the relationship between financial advisers and the board, including the board's responsibility with regard to adviser conflicts, and provided practical advice on retaining financial and other advisers.
The panel focused on important developments from the latest Delaware merger and acquisition and appraisal cases, as well as practical guidance for dealing with these developments.
Next, “Hot Issues in Corporate Governance and Preparing for the 2016 Proxy Season,” which was moderated by Thomas Kim, partner, Sidley Austin LLP and included Henry duPont Ridgely, senior counsel, DLA Piper LLP (US) and former justice, Delaware Supreme Court, focused on the most important findings to take from the 2015 proxy season.
Panelists also discussed new and anticipated rules, regulations and expectations of investors and proxy advisors that will impact the 2016 proxy season.
Why Delaware?
During the luncheon welcome, Charles Elson, director of the Weinberg Center, Edgar S. Woolard Jr. Chair in Corporate Governance and professor of finance, explored Delaware’s distinctive and influential legal position.
“Delaware effectively regulates corporate law in the United States and around the world,” Elson said.
He explained that many corporations moved to Delaware in the early 20th century after changes in New York and New Jersey law were deemed less than optimal for business.
Once corporations moved to Delaware, they found a number of reasons to stay.
“Delaware was unique because it had a judicial system, the Court of Chancery, that was uniquely positioned to determine corporate disputes,” Elson said.
He explained that the small state’s lack of conflicting interests made the development of corporate law the real interest of Delaware, leading to rulings that are done in an “intelligent, thoughtful way.”
Meanwhile, a responsive legislature and highly sophisticated corporate bar and judiciary contributed their inimitable qualifications.
“Though a small state-run court system, we’re very national in scope, because there’s no interest other than getting it done right,” Elson said. “We have a national system of business regulation coming out of this state.”
During the luncheon, there was a question and answer session with Bouchard, which was facilitated by Rolin Bissell, a partner at Young Conaway Stargatt and Taylor LLP.
Bouchard provided his views on the role of the Court of Chancery and with regard to certain important issues for directors and for those who advise directors.
The evening featured a reception hosted by Bullock and ended with dinner and a conversation with Martin Lipton, senior partner at Wachtell, Lipton, Rosen and Katz, which was facilitated by Darla Stuckey, president and CEO of the Society of Corporate Secretaries and Governance Professionals.
Lipton provided his views on many issues impacting board of directors and shareholders.
Ethical issues and a changing landscape
The second day of the Delaware Law Issues Update included two panel discussions that examined the latest developments on a variety of legal topics.
“Legal Ethics Issues in Corporate Governance,” which was moderated by Amy Goodman, retired former partner, Gibson, Dunn and Crutcher, and included Jack B. Jacobs, former justice in the Delaware Supreme Court, focused on issues that commonly arise in the corporate governance area and when advising boards of directors.
The panel discussed issues like attorney-client privilege and work product doctrine, including board and committee minutes, sharing of information and attorneys performing business functions.
Panelists also assessed ethical and practical issues in representation of independent directors and independent board committees, and ethical and practical issues in drafting advancement and indemnification bylaws and agreements.
The final panel of the conference, “The Changing Delaware Landscape for Bylaws and Dispute Resolution,” which was moderated by Jennifer Voss, partner, Skadden, Arps, Slate, Meagher and Flom LLP and included Delaware Supreme Court Justice Karen L. Valihura, discussed the latest developments in exclusive forum bylaws, fee-shifting bylaws and other new uses of corporate bylaws. There was also a discussion about companies re-incorporating in Delaware to benefit from Delaware law.
The panel also focused on the newly enacted Delaware Rapid Arbitration Act and its potential uses.
Photos by Evan Krape and Duane Perry