Corporate Aid of Governmental Authority: History and Analysis of an Obscure Power in Delaware Corporate Law

38 Pages Posted: 21 Jun 2013 Last revised: 10 Oct 2014

See all articles by David G. Yosifon

David G. Yosifon

Santa Clara University - School of Law

Date Written: June 19, 2013


The Delaware General Corporation Law contains an obscure provision stating that all corporations have the power to “[t]ransact any lawful business which the corporation’s board of directors shall find to be in aid of governmental authority.” 8 DGCL §122(12). This oddly worded provision has never been applied, analyzed, or interpreted by any court. It has received almost no treatment by corporate law scholars. This lack of attention is surprising, given that by its own terms the provision seems to bear on fundamental corporate law themes, such as the purpose of corporations, the scope of directors’ fiduciary obligations and discretion, and the relationship between corporate law and corporate social responsibility. In this Article, I examine the history behind this strange provision and analyze its applicability to pressing social policy questions surrounding corporate law.

My analysis leads both to narrow and broad policy conclusions. The narrow conclusion is that §122 of the Delaware corporate code is a textual mess that should be amended at least for coherence and clarity. The broad conclusion is that the analysis herein contributes to the case for reforming corporate governance law to require directors to actively attend to the interests of multiple stakeholders, not just shareholders.

Keywords: corporate law, corporate governance, shareholder primacy, corporate social responsibility, stakeholderism, Delaware, jurisprudence, Model Business Corporation Act

Suggested Citation

Yosifon, David G., Corporate Aid of Governmental Authority: History and Analysis of an Obscure Power in Delaware Corporate Law (June 19, 2013). 10 U. St. Thomas L.J. 1086 (2013)., Santa Clara Univ. Legal Studies Research Paper No. 12-13, Available at SSRN:

David G. Yosifon (Contact Author)

Santa Clara University - School of Law ( email )

500 El Camino Real
Santa Clara, CA 95053
United States

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