Beyond "Management-Friendly": The Shareholder Case for Texas’ 2025 Corporate Governance Reform

Amid declining legal certainty in Delaware driven by recent court decisions and an increasingly active plaintiffs’ bar, Texas’ 2025 corporate governance reform marks a deliberate bid to position Texas as a premier jurisdiction for corporate formation, governance, and dispute resolution. This article examines three central amendments to the Texas Business Organizations Code (§§ 21.419, 21.552, and 21.373) enacted by Texas’ 2025 corporate governance reform and seeks to demonstrate that, contrary to early criticism labeling such amendments as management friendly or anti-shareholder, these amendments are, in fact, beneficial to shareholders. As this article will demonstrate, these amendments introduce substantive changes to Texas corporate law designed to promote corporate governance practices and a corporate legal environment that provide greater value creation and returns for shareholders while deterring the exploitation of shareholder rights by third parties pursuing private gain. In this respect, Texas’ 2025 corporate governance reform offers a modernized governance framework that balances the interest of shareholders and corporate boards.