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When Elon Musk announced plans to move Tesla out of Delaware for Texas last year — following similar moves by companies to redomicile in Nevada — it fueled a debate about the merits of leaving the state long considered the gold standard of U.S. corporate law.

Yet despite the headlines, the pace of departures remains more trickle than flood, led by tech companies with heavy insider ownership and often against the wishes of minority shareholders.

According to Diligent Market Intelligence (DMI) data, at least nine public companies have held shareholder votes to reincorporate in Nevada or Texas in the first six months of 2025, up from seven in all of 2024 and five in 2023. Notable names include Tripadvisor, Affirm Holdings, Sphere Entertainment and The Trade Desk.

While many of these companies reference the annual “tax” they pay to Delaware as a reason to exit, one of the key drivers is understood to be legal exposure. “This is not about tax,” said Jeroen van Kwawegen, a shareholder rights attorney at Bernstein Litowitz Berger & Grossmann LLP. “This is about avoiding accountability. It’s about shifting the balance of power from shareholders to management.”

The tug-of-war over state charters highlights a deeper question about the balance between accountability and autonomy in U.S. boardrooms with Delaware at the heart of that debate for more than a century.





Delaware's dominance dates to the early 20th century, when a combination of flexible statutes, a specialized judiciary and favorable franchise taxes lured thousands of companies. Delaware’s Court of Chancery, with case law dating from 1792, built its reputation on speed, equity-focused judgments, and an aversion to jury trials and became synonymous with predictable outcomes and modern governance.

But that predictability has been tested in recent years. In 2024, the state’s Court of Chancery voided Elon Musk’s $55-billion pay package in Tornetta v. Musk, a ruling that cast doubt on Delaware’s deference to founder-led boards. For some executives, the message was clear: Delaware could no longer be relied upon to rubber-stamp aggressive governance structures.

Other states have seized on that uncertainty. Nevada has codified the business judgment rule and eliminated most forms of director liability short of fraud in a bid to attract more companies. Texas recently made it nearly impossible to bring shareholder derivative suits unless plaintiffs hold at least one-third of a company’s shares.

“Even as a shareholder, there’s very little you can do,” said Michal Barzuza, professor at the University of Virginia School of Law. “Nevada has no fiduciary duties. The bars to litigation are so high that there’s very little accountability.”

Such legal protections have attracted some CEOs and founders frustrated with what they see as Delaware’s increasingly interventionist courts. Silicon Valley venture firm Andreessen Horowitz was among the highest-profile converts, announcing in 2025 that it had reincorporated in Nevada and urging portfolio companies to follow. “What judges have given, they can take away,” the firm wrote in a blog post, praising Nevada for offering more predictability and cost control, especially for technology companies. “Litigation – even where successfully defeated – is costly and time consuming, particularly for the tech startups that need every penny they raise to build innovative companies.”





Redomiciling may appeal to some founders and directors, but minority shareholders have regularly opposed such moves. At Tripadvisor's annual meeting in 2023, more than 90% of minority investors opposed reincorporating in Nevada, though the proposal passed with 67% backing thanks to the voting control of Liberty Media’s Greg Maffei, according to voting results and as cited in lawsuits that tried but failed to block the move. Other departing companies like The Trade Desk, Affirm and Sphere Entertainment were also able to overcome opposition by minority shareholders due to large stakes by founders and dual-class share structures.

And activist investors who spoke with DMI argue that abandoning Delaware’s standards won’t put public companies off limits to shareholder action.

“Some states like Nevada and Texas may have more corporate-friendly statutes, but there are workarounds, noted Jim Chadwick, a veteran activist investor and portfolio manager with Ancora Alternatives. “And every public company holds an annual meeting no matter what state it’s incorporated in.”

It also is considered by many to send a message of hostility to shareholder oversight that could draw more, not less, activist pressure.

One west coast activist who asked to remain anonymous warned that any board of directors supporting such a move would serve as a “hot stick in the eye of the shareholders” who elected them. “It’s a window into the board's governance and culture; actions speak louder than words. We’d certainly see that as a tipping point.”





Delaware’s reputation, while bruised, remains a powerful draw. Almost 67% of Fortune 500 companies remain incorporated in the state, while 81% of U.S.-based initial public offerings in 2024 chose the state as their corporate home, according to a recent report published by the Delaware Division of Corporations.

Even as some companies consider exiting, others are returning. At an April special meeting, Daktronics shareholders approved its change of domicile from South Dakota to Delaware with the electronic signmaker pointing to the state's business-friendly legal framework and strong shareholder rights and protections. In fact, the move to Delaware was opposed by some shareholders, including activist Alta Fox Capital Management on grounds it would help to ‘‘entrench’’ the company’s board and management by eliminating cumulative voting.

At another April EGM, Uniti Group secured 92% backing for its plan to move from Maryland to Delaware. Five other companies held a vote to move to Delaware last year.

Delaware has weathered storms before. In the 1980s, backlash over director liability and poison pills forced quick reforms. But at that time rival states were still playing by roughly the same rules. Today is different, noted Barzuza, with Nevada and Texas offering boards a viable escape route from Delaware’s scrutiny. “Back in the 1980s other states’ laws were still mostly similar. What’s new today is that Nevada and Texas offer far weaker standards. That makes the equilibrium more fragile, and the future harder to predict.”



IN-DEPTH: The 'Dexit' Dilemma

As the clerk of a mid-sized city government, Moira Marshall spends her workdays shouldering a mountain of responsibilities: preparing for the upcoming council meeting, responding to public records requests, updating agendas for three different advisory boards and working to solve a technical issue that took a recent hybrid planning commission meeting offline.

It might not look like it, but Marshall’s job is essential to ensuring that democracy functions at the local level. Yet, like many city clerks, she’s working with limited time, minimal staff support and tools that haven’t kept up with modern demands.

Clerks such as Marshall experience common pain points that make their job harder and less rewarding. The right technology can help lighten the load, streamline operations and strengthen local government operations.

The role of the city clerk has grown far beyond recordkeeping and meeting minutes. Today’s city clerks ensure government transparency, maintain legal compliance and support public access to local government decision making.

As city and municipal governments become more complex, clerks are taking on expanded responsibilities — from running hybrid meetings and livestreaming to handling public records requests to supporting multiple boards and commissions. Technology, regulations and public expectations are changing, requiring clerks to be more adaptable, detail-oriented and tech-savvy.

With limited time and resources, city clerks work to ensure local governments run efficiently and remain accountable to the public they serve. As communities and governments become more reliant on digital tools, the clerk’s role will continue to change and grow.

Technology in the form of cloud-based board management software such as Diligent Community can help ease the pain points city clerks face.

preparing, distributing and archiving agendas and meeting minutes

 for councils, subcommittees and commissions. This often involves chasing down agenda items from department heads, coordinating last-minute changes and manually formatting minutes after long meetings. A request for a small change could require them to reprint, re-collate and re-distribute the agenda packets all over again.

Relying on multiple documents, spreadsheets and email chains makes this process time-consuming. It also makes the process vulnerable to errors, especially when clerks are under pressure to deliver accurate, timely records.

Manual processes are time-consuming, frustrating and expensive. Council members may have delays in getting accurate information before a meeting, which makes their job more difficult as well.

: Diligent Community’s digital agenda and minutes management platform simplifies and speeds up every step of the process. Clerks can build agendas using templates, automatically pull in items from department submissions and make real-time updates while tracking version control. During meetings, digital minute-taking tools enable live note capture, timestamps and action recording — making post-meeting edits and publishing faster and more accurately. Diligent Community’s public website feature allows clerks to share agendas and minutes with the community instantly.

Discover practical strategies and key tools to improve board effectiveness, enhance security and transparency. Take the first step to a more efficient and transparent government.

Transform your role as clerk

Staying compliant with public records laws

Public records laws require government entities to retain and produce records upon request — sometimes within just a few business days. Clerks must not only maintain meticulous records of meetings, correspondence and public notices, but also retrieve and deliver them on demand. When documents are stored across different systems and in a variety of formats, compliance becomes difficult, risking legal issues or public distrust.

: Diligent Community’s records management feature helps ensure compliance by centralizing documents in a secure, searchable system. Clerks can tag and organize records by type and date — so when a public records request comes in, they can locate and deliver documents quickly. Members of the public can also search easily to find key documents along with the agenda item and meeting minutes for it.

Coordinating multiple boards and commissions

Most clerks don’t just serve one board or government entity — they support multiple boards and commissions, each with their own meeting schedules, bylaws and members. Keeping up with term expirations, reappointments and documentation requirements for each board can feel like managing a dozen small governments. Critical tasks like notifying members, distributing materials and maintaining quorum records become a constant juggling act.

: Automated notifications help ensure members stay informed of upcoming meetings and deadlines. Clerks can also upload and distribute meeting materials securely, while enabling board members to access everything they need — agendas, minutes calendars — through a secure, central location.

 is higher than ever, and city clerks are on the front lines. Residents expect real-time access to agendas, meeting minutes, recordings and public notices. Yet many municipalities rely on websites or document repositories that are hard to navigate, making it difficult for citizens to stay informed. For clerks, ensuring timely publication and maintaining accessibility compliance adds yet another layer of responsibility.

: Diligent Community’s platforms give clerks the tools to publish documents and updates directly to a public-facing website with a simple but powerful search function, reducing manual steps. Features like automated publication and real-time notifications help clerks maintain transparency without adding extra work.

City clerks often wear many hats: recordkeeper, compliance officer, meeting facilitator and public liaison — sometimes all in the same day. With tight budgets and limited staffing, it’s easy to become overwhelmed. Routine tasks like preparing packets, fielding records requests or coordinating with departments can consume entire workdays, leaving little time for strategic planning or service improvement.

: Diligent Community’s workflow tools reduce the administrative burden on clerks. Tasks like document approvals, meeting reminders, email notifications and goal tracking can all be automated.

Meetings where members of the public can attend from their homes have become the norm, but they bring new logistical hurdles. Clerks must manage physical room setup, virtual meeting links, public livestreams and recordings on top of their regular duties. Audio/visual issues, tech glitches, or poor internet connections can derail meetings and disrupt public access.

: Diligent Community’s Livestream Manager combines video conferencing, livestreaming and agenda management in one place. Clerks can start a meeting, record it and capture minutes from the same interface. The livestreaming function allows public access through the city’s website, with features like automatic archiving and closed captioning to support accessibility. These systems reduce the stress and technical complexity of hybrid meetings, ensuring a seamless experience for both in-person and remote participants.

If you’re ready to half the number of hours your clerk spends preparing agendas, check out Diligent Community. Its digital tools create efficiency while reducing all of the common pain points that accompany the municipal clerk’s position.

But don't just take our word for it. Here's what Gwen Dombroski, Manager of Legislative Services/Clerk for County of Renfrew says, 

"With Diligent, our Council members come to meetings better prepared. Having centralized access to up-to-date materials, the ability to annotate agendas, and streamlined background processes means discussions are more focused, and decisions can be made with greater confidence and clarity. Council adapted quickly and effortlessly to the Diligent platform.”

 to find out how Diligent Community can make your clerk’s job easier and increase efficiency.

Common pain points for city clerks and how technology can help

This article originally appeared in our August 14 edition of the Diligent Minute Newsletter. For more insights like these, delivered straight to your inbox, subscribe

Transaction activity (acquisitions, funding rounds, and IPOs) may be lower on many corporate priority lists right now, as market slowdowns, policy uncertainty, and trade whiplash continue. M&A announcements recently 

That’s why Diligent is currently collecting insights from boards and executives about what’s working (and what’s not) when it comes to transaction readiness. If your organization has recently completed or is planning for a transaction, we encourage you to participate in our ongoing 

in collaboration with Wilson Sonsini, NetSuite, the CFO Leadership Council, and the CFO Alliance.

Despite recent turbulence, however, research from our 

 conducted with Corporate Board Member shows 76% of public company directors still see growth as the year’s top priority, and nearly 40% specifically cite M&A as a key agenda item for their boards, with smaller companies most likely to lean in as deals return.

Deals aren’t off the table; they may just be harder to attract. And that makes them even more valuable.That means getting your governance house in order should be a top priority, so you won't miss out when opportunity knocks.

 published by Diligent, dives into transaction preparedness and emphasized a key point worth repeating:Investors, regulators and the leadership teams putting a deal together today demand governance that’s fast, transparent and ready for anything.

Here are a few things to keep in mind for achieving this goal:

“We’ll tackle it when it happens” is no longer a viable strategy for transaction preparation.

When reporting is rushed, or due diligence not given its due, errors happen. Outdated information finds its way into documents, and important details fall through the cracks, impeding decisions, impacting valuations and even stalling deals entirely.

This last-minute scramble goes away when companies integrate transaction-ready governance into everyday operations. Compliance processes and audit reporting are robust. Board composition is strong. And the business itself is positioned to strike — successfully — when opportunity arises.

Getting your house in order requires the right tools

Transaction readiness also demands the right technology and processes. For example, think about all of the activities a merger or acquisition entails. Effective execution requires clean entity records, organized due diligence documentation and accurate, transparent audit trails that track progress as it happens.

Kristy Grant-Hart, Head of Advisory Services at Diligent, spoke from recent experience navigating Spark Compliance’s acquisition: “The pace and complexity of today’s deals is incredible. There is so much data and information to obtain in such a short time. Having connected, secure systems, and being ready for due diligence was absolutely critical in getting through the process smoothly. Unified collaboration across systems, data, and people is the key to success.”

Now is the time to bring such capabilities on board. Integrated reporting, AI-driven workflows, secure document management — they are all essential to minimizing risk and building investor trust.

Transaction readiness signals credibility and gives your company the edge when it counts.

PE and VC firms are understandably selective right now. They want to see clean financial reporting and clear governance structures, proactive risk management and agile, scalable systems. They want to invest in nimble, resilient companies who demonstrate progress against their objectives and deliver long-term value.

Disciplined transaction readiness gives them confidence.

What does this mean for your ongoing operations? For starters, benchmarking, due diligence reviews and scenario planning are more than rote compliance exercises. They’re strategies that sharpen your competitive edge.

Moreover, disciplined governance not only attracts more opportunities but also increases the likelihood of faster, smoother transactions and successful integration post-close.

As we have highlighted, while the IPO market remains cautious, it is far from closed. Meanwhile, the M&A pipeline is poised to accelerate as private equity firms seek exits and strategic buyers pursue growth.

The companies that embed transaction readiness into their culture today will be best positioned to act decisively and gain a competitive edge when the market shifts.

Want regular access to original research in the field of GRC? Bookmark our 

 for the latest surveys, podcasts and reports.

Preparing your team, tech and tactics for deals on the horizon 

Leadership in the boardroom is a multifaceted journey that requires a blend of diverse experiences, proactive engagement, and strategic preparation. At the Next Gen Board Leaders Summit, seasoned board chairs including Alicia Syrett, Founder of Madam Chair, provide valuable insights on what it takes to lead a board effectively and create a strong boardroom culture.

The ​​p​​ath to ​​b​​oard ​​l​​eadership

​​Board​ chairs typically reach their positions through a combination of executive experience, committee work, and active involvement in board matters.​There​’s no set formula, but d​​iverse backgrounds and a ​​bias for action​​​ a​re essential. Continuous learning, such as seeking out mentors and familiarizing oneself with board and committee responsibilities, can help build the necessary skills and credibility. ​That said, ​​i​t's also crucial ​for aspiring chairs ​to be realistic about the time commitment required for the role.

Resources and ​​p​​ractices for ​​e​​ffective board chairs

To excel in the chair role, familiarity with key resources like 'Robert’s Rules of Order' and practical articles like 'How to be a Good Chair' can provide a solid foundation. ​Bu​t it’s the consistent habits that matter most. ​​Strategic use of the agenda, starting meetings with ​​planning​ and forward-looking topics​, and conducting pre-meeting calls with directors can ​clarify priorities and ​foster alignment. Engaging directly with shareholders and proxy advisors is vital for anticipating issues and building trust. Regular communication with the CEO and fellow directors, as well as ​​creating​​ an environment where directors feel comfortable raising ​​tough questions and dissenting views​​ is also crucial.

: ​​A good​​ board chair ​​acts as​​ the 'conductor of the orchestra,' responsible for ensuring the board operates cohesively.

: Effective chairs take their responsibilities seriously, benchmark against other boards, and ​​seek​​ regular ​​feedback from​​ the CEO and fellow directors.

​​​Making the most of​​ meeting time

: By prioritizing strategic planning​, sharp agendas, and candid discussion,​ the chair can ​drive more meaningful outcomes ​​​​​​​in​​ limited meeting time.

​​M​aintaining a ​​s​​trong ​​b​​oardroom ​​c​​ulture

​​​Culture starts with the chair – and a​​ robust boardroom culture is essential for the board's effectiveness. Regular assessments, ideally conducted by third parties to gather unfiltered feedback, are critical. The chair should act on this feedback and​​ actively reinforce high expectations for board conduct and performance​​. By identifying and ​​actively drawing out​​​​​​ the strengths of each board member, the chair can ensure that the board remains a dynamic and effective decision-making body.

In summary, effective board leadership ​requires more than experience ​– it calls for ​​​​preparation, ​​intentionality, ​​and a commitment to fostering a strong, cohesive boardroom culture. By following the insights shared by experienced chairs, aspiring leaders can better navigate the complexities of board leadership and contribute to the success of their organizations.

Diligent

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IN-DEPTH: The 'Dexit' Dilemma

Common pain points for city clerks and how technology can help

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