Being Right Isn't Always That Great

Early this week, I posted about the possible increase in corporate relocations to Ohio and Pennsylsvania. That post also mentioned that the North Dakota Publicly Traded Corporations Act seems to have fallen off the proxy and governance radar.  Professor Bainbridge noted that he was right that North Dakota was not going to be any sort of competitor with Delaware on this front. His essay is here. I would note that his rationale (as is often the case) is hard to refute, and he most certainly was right, but it was a little like picking the Patriots over my beloved Lions last Thanksgiving. 

I wrote an article (pdf) in the same symposium issue, where I posed a different question. That is, I didn't think North Dakota was going to have a serious influx of new companies. I figured four or five was probably the cap.  But I think that the law, with the significant news interest generated, offered an opportunity, if seized, for North Dakota to make a statement that the state is open for, and open to, big business. My point:

Although the Act was not a part of a focused and concerted branding effort for North Dakota, or apparently even a significant ideological commitment to increasing shareholder rights, the state could stand to reap some benefits of offering the first-of-its-kind statute. To do so, however, the state must embrace its position. If the Act is to be taken seriously, North Dakota should: (1) embrace the federal shareholder choice legislation, (2) promote the Act with a coordinated pubic relations and/or advertising campaign to raise awareness of the state’s innovative approach, and (3) pass and promote other innovative legislation that makes clear North Dakota is a forward-looking, forward-thinking state as far as businesses are concerned. 

If the Act is a singular, isolated piece of legislation that is quietly available for anyone who wants it, it is simply some small state law written by large investors (and their advocates) to irritate large companies. But, by embracing the Act and the potentially innovative corporate governance it represents, North Dakota has an opportunity to change, or at least modify, some perceptions about business in the high plains. To do so, would require some effort. (footnotes omitted)

Unfortunately, that effort has not been put forth, and (at least so far) this has been a missed opportunity.  

--JPF