Delaware's Diminishment?

40 Pages Posted: 13 Aug 2017

See all articles by Hillary A. Sale

Hillary A. Sale

Georgetown University Law Center; Georgetown University - Robert Emmett McDonough School of Business

Date Written: August 10, 2017


In the world of corporate law, Delaware reigns – or so the theory goes. This Chapter examines the reality of that statement, focusing on directors and their fiduciary duties in the context of the nexus of contracts theory and Delaware’s default-based system of governance. I argue that the nexus of contracts approach fails to explain the reality of today’s corporate governance structure and that the same is true with respect to Delaware’s role as a nexus in the nexus of contracts world. Instead, the private, contract-based space, to the extent it ever existed, has been occupied by the federal government for quite some time – and the occupation takes place both directly and indirectly. Two theories developed in other works are key to this analysis: the theory of publicness and the information-forcing-substance theory, or the manner in which federal securities disclosure provisions develop director fiduciary duties.

Keywords: Securities regulation, disclosure, publicness, fiduciary duty, corporate law, corporations, Delaware, corporate governance, financial crisis, disclosure, federalism, directors, oversight

Suggested Citation

Sale, Hillary A., Delaware's Diminishment? (August 10, 2017). Washington University in St. Louis Legal Studies Research Paper No. 17-08-01. Available at SSRN: or

Hillary A. Sale (Contact Author)

Georgetown University Law Center ( email )

Georgetown University - Robert Emmett McDonough School of Business ( email )

3700 O Street, NW
Washington, DC 20057
United States

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