Texas has long been recognized as an economic and legal powerhouse. At a recent series of panels hosted by Baker Botts along with NACD, industry experts examined three key areas where Texas is making waves: the anticipated launch of the Texas Stock Exchange and Dallas’s emergence as a major financial hub; the evolving demands of corporate and non-profit boards; and the increasing interest in companies reincorporating in Texas from Delaware and elsewhere, driven by factors including the state’s new Business Court. These conversations underscored the accelerating momentum of Texas in both national and global markets.

From charting new territory in accessing and leveraging the capital markets to navigating shifting board governance priorities and reimagining a modern corporate legal framework, each panel illustrated the unique value Texas offers today’s businesses. Whether guiding clients through access to capital markets, advising on board composition and governance best practices, or providing counsel on unique elements of Texas’s corporate governance law and judicial processes, Baker Botts leverages its deep Texas roots and extensive corporate law and public company expertise to position clients for success in this rapidly evolving environment.

The Texas Stock Exchange and the Booming Economy in Dallas

Dallas is now the second-largest financial hub in the nation after New York, with five-year job growth outpacing every other metro area in the country and 50 Fortune 500 firms calling the state home. Recently, the Texas Stock Exchange filed papers to challenge the New York–dominated exchange industry, an exciting development that will increase competition and cement Texas as a financial powerhouse. In a timely twist, the morning after this panel, the New York Stock Exchange announced plans to launch a fully electronic equities exchange in Dallas called NYSE Texas.

Moderator Samantha Crispin, Corporate Department Chair at Baker Botts whose practice focuses on public companies, led a conversation about how this new exchange aims to revitalize a market that has seen a 10-year low in the number of public companies. Panelists included Nicole Chambers, Global Managing Director of Listings at the Texas Stock Exchange, and Shamoil T. Shipchandler, Chief Counsel of the Risk and Regulatory Legal Group at Charles Schwab.

Key Takeaways:

• Texas as a Growing Corporate Base: Building on a pro-business climate and a critical mass of 50 Fortune 500 headquarters, the Texas Stock Exchange represents a natural evolution of the U.S. capital markets. With more business decisions being made locally, Texas is well positioned to anchor its own capital formation.
• Ease of Doing Business: Texas offers a streamlined, business-friendly environment not always found elsewhere. The state’s image continues to shift from a “Wild West” reputation to a “Western sensibility” marked by a highly skilled talent pool, which rivals traditional legal and financial centers.
• Major Founding Investors: Backers include household names such as Charles Schwab, Citadel Securities, and BlackRock, signaling strong institutional confidence in the new exchange and its potential to shape the future of U.S. capital markets.
• High-Quality Product: The Texas Stock Exchange aims to stand out with stringent listing standards—of the approximately 4,400 current publicly listed companies, about 1,700 would not qualify—and a modern technology infrastructure that incorporates real-time feedback, avoiding pitfalls of legacy systems.
• Aligning With SEC Priorities: Under new leadership, the SEC is expected to encourage capital formation while continuing to protect investors. Faced with a slowdown in IPOs and the sharp decline in the number of public companies, many believe the agency’s focus going forward will be on supporting growth, with a shift away from attention on minor technical violations.
• Early Targets and Physical Presence: ETFs, ADRs, and dual listings will be prioritized initially, recognizing that some boards may remain cautious about new markets. Crucially, the exchange plans to maintain a physical location in Dallas, tapping into the emotional appeal of a tangible trading floor while championing “capital markets for all.”
• Healthy Competition: By giving companies an alternative to existing exchanges, the Texas Stock Exchange fosters a more competitive marketplace. Greater choice ultimately drives innovation and ensures that firms can select the platform that best meets their needs.

Strategies for Playing the Board Game

Joining a corporate or non-profit board can be a challenging endeavor and requires careful preparation and planning. Boards are making new demands on candidates for a board role and now increasingly seek digital and cybersecurity expertise to meet modern challenges.

Baker Botts partner Geoff Newton led a conversation regarding board service opportunities with Renee Arrington, President & COO of Pearson Partners International and Global Chair of IIC Partners, and J. Puckett, Senior Partner, Emeritus, of the Boston Consulting Group.

Key Takeaways:

• Opportunities at Any Career Stage: Board service can fit into various phases of your career—even retirement. Motivations differ: some individuals have a sense of purpose or a strong interest in an industry or initiative and want to leverage their experience, while others see board membership as an avenue for additional income, intellectual challenge or prestige. Search firms focus on finding candidates whose background aligns with the organization’s mission and values.  Demonstrating a passion for the role is consistently an important factor in any search for a board role.  If serving on a for-profit board is not possible at a given time, there are ample non-profit opportunities that provide meaningful community engagement and valuable governance experience.
• Role of Search Firms: Before reaching out to potential board candidates, search firms learn about the open role, board dynamics and the specific needs of the company. This due diligence helps them ask pertinent questions and access their extensive  networks, ensuring they bring in fresh talent rather than the “usual suspects.”
• Essential Skills for Modern Boards: NACD’s “Inside the Public Company Boardroom” report highlights the continued need for management expertise, strategic vision, industry experience, and financial acumen. Increasingly, boards also prioritize human capital management, cyber expertise, and digital transformation skills to address evolving business risks.
• Securing Your First (or Next) Board Seat: Adopt a long-term perspective, highlight your distinctiveness, and do your homework.  Build a network that is capable of connecting with a variety of opportunity sets.  Seek out conversations with current board members to understand how they got involved and to learn the company’s history and culture.
• Diversity Is Still on the Agenda: Even amid political debates over diversity, equity, and inclusion initiatives, companies continue to see the value of varied perspectives at the board level. Diverse voices (defined in various ways depending on the needs of a company) are still widely viewed as yielding more innovative solutions and stronger organizational performance.

How Texas is Building an Attractive Corporate Legal Infrastructure

On the heels of the launch of Texas’s new Business Court, many are asking whether the Lone Star State can join Delaware as a top choice for incorporation. With commentators and members of the business community increasingly raising concerns that Delaware law has become less predictable, Texas is positioning itself as a compelling alternative.

Baker Botts partner John Lawrence moderated a conversation with Shane Goodwin, PhD, Associate Dean at the SMU Cox School of Business, and Tom Leppert, former mayor of Dallas.

Key Takeaways:

• State of Incorporation Matters: A company’s state of incorporation is not just a matter of which form a lawyer fills out.  The state of incorporation is your corporate home, and in choosing that corporate home you are choosing the legal structures and systems under which your board and executives will be making the decisions that drive the future of your organization.  
• A Stark Contrast in Numbers: Texas is home to more than 50 Fortune 500 headquarters, but only three of those companies are incorporated in the state. Delaware is home to only one Fortune 500 headquarters—but more than 300 Fortune 500 companies are incorporated in the state.    Texas has long been successful in enticing corporate headquarters, and is now working to show that its corporate law and courts also make it a compelling choice for a company’s legal home.
• Why Delaware?: Corporations have traditionally favored Delaware for its comprehensive corporate statutes and its well-established Court of Chancery, where judges serve 12-year terms, bringing deep expertise and consistent rulings based on a deep body of case law. The absence of jury trials has historically also added to the perception of predictability.
• Shifting Judicial Landscape: Some commentators have raised concerns with recent Delaware rulings, and several companies have begun reincorporating outside of Delaware or publicly announced they are contemplating doing so.  Delaware is still by far the state chosen most often for incorporation, but the century-old presumption that large corporations will be incorporated in Delaware is being questioned.
• Texas Reaches a Tipping Point: With an influx of major corporations relocating to Texas, Texas has worked to update its corporate law and court system to match its economic might.  The new Business Court that will preside over corporate governance disputes in Texas—along with an existing set of corporate governance statutes designed to strongly protect the interests of corporations and their stockholders alike—are making the state an increasingly attractive option for incorporation.  
• Texas’ Governance Law is Strong and Practical: Like Delaware law, Texas law requires directors to act in accordance with robust fiduciary duties and provides for strong oversight by both stockholders and courts.  But Texas law contains some practical differences in the deference courts will give to actions that a board took in exercising its business judgment, and in the standards that individual stockholders must meet to challenge those actions.
• Directors Taking Notice: Directors have been following the news of recent Delaware opinions and of high-profile companies moving to Texas, and are asking their executives and counsel to consider their own place of incorporation.   A company’s state of incorporation is important, and directors should be asking these questions.
• A Logical Next Step: As more companies relocate to Texas, the question becomes: why not incorporate there, too? The state’s business-friendly environment and evolving legal infrastructure are making it an increasingly compelling option for both headquarters and charters alike.

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