Elon Musk’s response to the Delaware court ruling on his $56 billion pay package has sparked a broader debate on corporate governance.

Musk openly criticized Delaware’s judiciary on social media, moved Tesla and his other companies’ incorporations elsewhere, and urged others to do the same, according to CNBC.

In response to the wave of corporate exits, Delaware Senate Majority, Leader Bryan Townsend, a corporate attorney and former Chancery Court clerk, began examining the issue with other lawmakers.

Dropbox has since reincorporated in Nevada, while Bill Ackman’s Pershing Square Capital Management plans to leave Delaware. Meta and Walmart are also reportedly considering a move.

Townsend later introduced SB 21, a bill designed to reinforce Delaware’s appeal as a business-friendly state.

On Thursday, Delaware’s Senate passed an amended version of SB 21.

If approved by the House next week and signed by the governor, the bill will introduce changes to the state’s corporate law.

The bill would change how companies use independent directors and other officials to validate deals in court and restrict shareholders’ access to company records when probing potential misconduct.

Townsend said the goal is to make Delaware’s corporate law clearer and more predictable, keeping the state attractive to investors and business leaders.

However, many institutional investors, legal scholars, and shareholder attorneys oppose the bill, arguing it would disadvantage minority shareholders and enable boards and executives to prioritize their own interests over those of investors.

The International Corporate Governance Network, representing investors managing over $90 trillion in assets, opposed the bill on Tuesday.

Its members include Alliance Bernstein, the Swedish AP funds, BlackRock, CalPERS, CalSTRS, Franklin Templeton, Norges, and Vanguard, according to its website.

ICGN CEO Jen Sisson warned in a letter to Delaware lawmakers that SB 21 would undermine shareholder rights and could negatively impact long-term investor returns, including retirement savings and individual investments.

Sisson also stated that the bill would weaken judicial oversight and erode shareholder trust by limiting their ability to pursue legal remedies when needed.