July 01, 2023 | Bloomberg Law | 1 minute read

Seaford, Delaware, a small town about 40 miles inland from the Atlantic Ocean, is attempting to give town-based businesses votes on electing its mayor and council members. Seaford’s initiative is one of the first attempts in the state—if not the first—wherein a town aims to turn businesses into voters as an economic development tool to spur more outside investment.

Bracewell’s Rachel Goldman told Bloomberg Law that inviting corporations to vote could mean that they will have an “outsize influence on the politics in that town.”

Few Seaford-based companies are publicly traded. But any proliferation of the proposal could become a corporate governance issue. Shareholders have already been aggressively seeking details about how companies devote money for political lobbying.

“Shareholders are going to be very concerned with who those companies are voting for,” Goldman said. “It could create a lot more shareholder disputes or proxy actions or other further issues for companies that are not small or closely held.”