Former U.S. Attorney General William Barr wrote an article in today’s Wall Street Journal arguing: Delaware is at risk of losing its prominence in corporate law because of what the former U.S. Attorney General describes as the increasing infiltration into Delaware corporate law of ESG priorities, for example via Caremark claims.
Barr describes ESG as a means to inject left-leaning policy preferences into the law. It’s not a law review article, although he refers in passing to several developments that those familiar with Delaware corporate law will recognize. Whether he is correct or not in his admonition is currently a topic of debate among various sectors in the legal profession.
UPDATE: Professor Stephen Bainbridge, one of Delaware’s favorite corporate law scholars, has written an erudite response to AG Barr’s article, with copious citations and quotes from the good professor’s own extensive scholarship on the topic, as well as the publications of other leading authorities. Among the quotes in his article linked above, is one from a former Chancellor and Delaware Supreme Court Chief Justice, described as “pro-ESG”, which follows: “It is not only hollow but also injurious to social welfare to declare that directors can and should do the right thing by promoting interests other than stockholder interests.”
SECOND UPDATE: The Chancellor of the Delaware Court of Chancery, as reported in an article by Reuters, responded during a seminar to the referenced article by AG Barr, and Vice Chancellor Travis Laster also provided a rebuttal on LinkedIn, and invited AG Barr to a debate, as described in follow-up commentary by Professor Bainbridge–which includes, as usual, copious citations to his own extensive scholarship and the publications of other corporate law scholars.