Under the Pennsylvania constituency statute, the court explained that directors are not required to treat the financial welfare of shareholders as the paramount concern. Conspicuously absent from the list of states adopting constituency statutes is Delaware, home of the shareholder-friendly Revlon Duties and state of incorporation of more than 40 percent of the companies listed on the New York Stock Exchange and more than half of Fortune 500 companies. Most states, including those with constituency statutes, look to Delaware law when interpreting local corporate law. Normally, there is no conflict between Delaware takeover law and state constituency statutes. Absent a trigger of Revlon Duties, both permit consideration of nonshareholder interests in making most corporate decisions.
Many constituency statutes go further than Delaware law.
Typically, constituency statutes do not require any nexus between nonshareholder consideration and a rationally related benefit for shareholders. In addition, under constituency statutes, there is no magical time when a board must stop thinking about nonshareholders and think only of shareholders. Under constituency statutes, directors may consider nonshareholders at every step of the process. These are very real concerns for high-growth and emerging companies who engage in strategic mergers to replace retiring officers, enter new capital markets and combine strengths to maintain competitiveness. Generating quick profits is often incompatible with their corporate mission.