There is a recent, yet rapidly evolving, debate in Delaware surrounding exclusive forum provisions — charter or bylaw provisions mandating that intra-corporate disputes (such as stockholder derivative actions) be brought exclusively in a particular forum, typically in the corporation’s jurisdiction of incorporation. Delaware corporations have adopted these provisions in their charters or bylaws with increasing frequency in the past two years, but when sixteen separate board-adopted bylaw provisions (or proposals for charter amendments) were recently challenged in Delaware Chancery Court, nearly all were voluntarily removed or abandoned.

Two large-cap companies — Chevron and FedEx — are defending their board adopted exclusive forum provisions in cases being closely watched by corporations, investors and corporate governance experts, and all of this is happening against the backdrop of a 2011 California federal court decision refusing to enforce a similar exclusive forum bylaw provision adopted by Oracle’s directors. And in a development that highlights the very issues at the core of this debate, Chevron’s bylaws are now subject to a separate challenge in the very same California district court that refused to enforce Oracle’s.

This issue of The Public Company Advisor contains an up-to-date analysis of the issues and practical advice for companies that have already adopted an exclusive forum provision and companies currently considering one.