ExxonMobil’s board recently proposed shifting the company’s state of incorporation from New Jersey to Texas.
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Through a quirk of regulation and history, the tiny state of Delaware has served as the default home for business headquarters in the United States. That’s because, for much of the past century, Delaware’s corporate law provided stable rules of the road that American and international businesses could rely upon for predictable outcomes.
But stability, if left unchallenged, can harden into complacency. Today Texas is emerging as the next big capital for capital. That’s because the Lone Star State has been reforming its own corporate laws to strike a better balance between accountability and value creation at a time when Delaware is moving backwards. Consider it a healthy development in a federalist system that encourages competition and experimentation.
And corporations have taken notice.
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Earlier this month, ExxonMobil released a proposal to shareholders to shift the company’s state of incorporation from New Jersey to Texas. Unlike, say, cryptocurrency exchange Coinbase moving to Texas, this isn’t the result of a single big shareholder going for a big swing. ExxonMobil has a broad and diverse ownership base that includes large asset managers and millions of Main Street retail investors.
ExxonMobil’s board concluded that Texas’ legal and regulatory environment would better serve those shareholders. As CEO Darren Woods explained, Texas has “created a policy and regulatory environment that can allow the company to maximize shareholder value.”
So what, specifically, has Texas changed that these corporate leaders found so appealing?
At the heart of the Texas reform effort is the creation of the Texas Business Court. Its appointed judges — each experienced in commercial litigation — presided over 185 cases in the court’s first year. Sixty of those cases reached a final outcome or resolution, mostly within 180 days.
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That’s a significant shift from the old system, where business cases would move through the court system alongside every other type of case, from small-dollar claims to murder charges, potentially delaying judicial action for all types of litigants. Now, just as Texas has a dedicated Court of Criminal Appeals, it has a dedicated court for business issues, too.
Also at the heart of the reform is changes to the Texas corporate law designed to enhance predictability. Specifically, Texas codified the business judgment rule, a foundational doctrine in corporate law that presumes directors and officers are acting in good faith and in a company’s best interest unless proven otherwise. This means that plaintiffs must meet a high bar to bring forward a lawsuit challenging corporate decisions. Moreover, companies can trust that the business judgment rule will be applied consistently, unlike in Delaware, where the rule is not codified and judges have substantial case-by-case discretion to second-guess the board chosen by the shareholders.
The developing ecosystem in Texas has already produced striking results.
In 2025, Texas had more than 3 million registered businesses, more than doubling the number from 2015. Roughly 200 companies have relocated to Texas since 2020 — including Fortune 500 companies and iconic American brands like Chevron, Oracle and Caterpillar.
The Texas story also reflects the American experiment in federalism — one of our country’s most distinctive strengths. This system allows states to serve as laboratories of experimentation and grants citizens (and corporations) the freedom to choose the home that best meets their needs.
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Competition ensures accountability. If a state’s policies fall out of sync with economic realities, capital and corporate leaders will respond. Conversely, states that strike the right balance between oversight and opportunity are rewarded. This feedback loop ultimately keeps governments responsive and disciplined.
At Texas A&M School of Law’s corporate law symposium last month, Securities and Exchange Commission Chairman Paul Atkins offered a strong endorsement of that dynamic. Texas, he observed, has begun to build “a framework designed to attract companies with shareholders who are eager to get back to basics, with less politicization, abusive litigation and overall drama.”
Delaware built its traditional leadership in corporate law by adapting to the needs of businesses and investors. Texas is doing the same, though with a distinct advantage. Unlike Delaware, Texas offers businesses more than a predictable business legal system and a place to put a P.O. box — the state also offers an attractive location for companies to build, hire and create. By bringing together effective legal institutions, a competitive regulatory philosophy, a robust economy and real-world growth opportunities for everyday people, Texas is offering a one-stop shop for corporations to better innovate and compete on the global stage.
The future of American corporate governance will not be written in any single state. But by embracing experimentation, institutional excellence and economic opportunity, Texas is helping to write the next chapter of the American business story: one centered on opportunity, entrepreneurship and innovation. That is a good story for all of us.
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Robert Ahdieh is dean of the Texas A&M School of Law in Fort Worth, Texas, where the Eighth Division of the Texas Business Court is housed.
Trey Cox is co-chair of Gibson Dunn’s global litigation practice group and co-partner in charge of the Dallas office.