The bill amends the Texas Business Organizations Code to improve the governance and operational framework for business entities, particularly those with shares listed on national securities exchanges. It provides a clearer definition of "national securities exchange," allowing for exchanges registered under federal law or with a principal office in Texas that meet state approval criteria. The bill introduces a section stating that the internal governance of domestic entities cannot be altered by the laws of other states, while still permitting managerial officials to consider external laws and practices. Key provisions include establishing exclusive forums for internal entity claims, allowing governing documents to waive the right to a jury trial for such claims, and outlining a process for assessing the independence of directors in transactions involving controlling shareholders.

Additionally, the bill clarifies the presumptions and requirements related to the actions of corporate directors and officers, as well as the rights of shareholders in derivative proceedings. It establishes that directors and officers are presumed to act in good faith and in compliance with the law, while also specifying that neither the corporation nor its shareholders can initiate a cause of action against a director or officer unless certain presumptions are rebutted. The definition of "shareholder" is expanded to include those acting in concert regarding derivative proceedings, and new requirements for initiating such proceedings are introduced. The bill also allows corporations to seek court determinations on the independence of directors concerning derivative demands and clarifies that additional disclosures to shareholders do not constitute a substantial benefit to the corporation, ultimately aiming to enhance corporate governance and protect the interests of both corporations and shareholders.

Statutes affected:
Introduced: Business Organizations Code 2.115, Business Organizations Code 4.051, Business Organizations Code 21.218, Business Organizations Code 21.416, Business Organizations Code 21.418, Business Organizations Code 21.551, Business Organizations Code 21.552, Business Organizations Code 21.554, Business Organizations Code 21.561, Business Organizations Code 21.562 (Business Organizations Code 2, Business Organizations Code 21, Business Organizations Code 4)