Delaware Governor Matt Meyer (D) signed into law sweeping changes to the state’s corporate governance framework on Tuesday, just hours after the legislature passed Senate Bill 21 by a 32-7 vote. The legislation, which has sharply divided the state’s legal and business communities, marks the most significant revision to Delaware’s corporate law in years.

According to Bloomberg Law, the bipartisan measure was fast-tracked through the legislature and signed by Meyer on the same evening it cleared the House. The law lowers judicial guardrails on insider transactions, restricts shareholder access to internal communications like emails and texts, and strengthens presumptions of director independence from management and controlling shareholders.

Meyer has framed the legislation as a necessary update to preserve Delaware’s dominance in corporate chartering. “Delaware is the best place in the world to incorporate your business,” Meyer said, adding that SB21 ensures “clarity and predictability” while balancing stakeholder interests.

Opponents, however, argue the law is a direct response to mounting corporate pushback—most visibly from Elon Musk—following recent court rulings imposing heightened scrutiny on boardroom conflicts of interest. They warn that SB21 could erode judicial oversight and embolden management in ways that harm shareholders. Tesla’s relocation to Texas, which followed a Delaware court’s rejection of Musk’s $56 billion compensation package, was frequently cited during debates over the bill’s urgency.

The legislative process surrounding SB21 was itself a point of contention. According to Bloomberg Law, the drafting bypassed the Corporation Law Council, the state bar subcommittee typically responsible for vetting such measures. Instead, the bill was developed by a panel selected by Meyer, which included former judges and defense lawyers tied to Musk and other high-profile executives.

Several proposed amendments—aimed at preserving shareholder rights and limiting the law’s retroactive application—were rejected on the House floor. One amendment, backed by a group of law professors and former SEC Commissioner Robert J. Jackson Jr., would have made the bill’s provisions opt-in rather than mandatory. Jackson’s attempt to testify was cut short by House Speaker Melissa Minor-Brown (D), who deemed his remarks off-topic.

Rep. Madinah Wilson-Anton (D), a vocal critic of the bill, warned that it risked undermining Delaware’s legal credibility. “Passing SB21 as written would cook the golden goose,” she said. Her witness, Jeff Mahoney of the Council of Institutional Investors, echoed the concern, arguing the bill weakens accountability mechanisms shareholders rely on.

Supporters of the bill, including Rep. Krista Griffith (D) and retired law professor Lawrence Hamermesh—one of the bill’s drafters—countered that the proposed amendments would “swallow the rule” and negate the law’s intended effect. Hamermesh previously testified in favor of SB21 before multiple committees and legislative bodies.

The Delaware State Bar Association, notably, withheld support for the bill, even as its corporate law committees remained involved behind the scenes. As implemented, SB21 may reshape how companies, investors, and courts interact within the state’s influential corporate framework, setting a precedent for other jurisdictions navigating similar tensions between board authority and shareholder oversight.