On November 9, 2026, the Council of the Delaware State Bar Association’s Corporation Law Section released a White Paper and Discussion Draft proposing a new DGCL § 214 that would govern stockholder precatory proposals if, as seems likely, the SEC rescinds Rule 14a-8. The release starts a 60-day comment period, with an eye toward action by the General Assembly in the first half of 2027 so that the new regime can be in place for the 2028 proxy season.
The Delaware Secretary of State’s office and the Delaware Bar Association are seeking comments on the proposed legislation. I filed comments with them this morning. This post reflects those comments.
As regular readers know, I have previously submitted comments to the SEC in connection with its proposal to rescind Rule 14a-8 (copy available here). In those comments, I argued that Rule 14a-8 is bad law and worse corporate governance theory. The gist of my argument is that corporations are not democracies. As such, Rule 14a-8 is fundamentally inconsistent with the board-centric model of corporate governance known as director primacy.1 As discussed in more detail below, that inconsistency is important and relevant to the proposed legislation because Delaware corporate law has long embraced a board-centric approach.2
One of the Commission’s arguments for rescission of Rule 14a-8 was that the federal rule had stunted the development of state law and private ordering. An advantage of rescission, the SEC said, is that doing so would let states and companies themselves decide what role, if any, shareholder proposals should play in corporate governance.
Delaware has now given us a preview of its answer. And, curiously, the answer is a mandatory state-law shareholder proposal rule. To be sure, the Council’s version is leaner than the federal original. It is capped, tiered, and stripped of the SEC’s no-action apparatus. But at bottom it takes a privilege that, as the White Paper itself concedes, Delaware law has never recognized and turns it into a statutory entitlement that neither the board nor the charter may modify. Put another way, it is Rule 14a-8 with a Delaware accent.
In this post, I first summarize the Discussion Draft. I then explain why I think it departs in important respects from the director primacy model on which Delaware law is built. Finally, I offer some additional critiques.