-Not odd perhaps that it should seem to Nathan from a course in law -school that changes in the law were causal. But they weren't. I was -there, arguing before Chancellor Brown in the early 80s in Wilmington -(and against him in the later 80s after he went back to private -practice). Management prerogs formally were not cut back one bit in -Delaware (see fiduciary duty/greenmail law for example).
I won't make as strong a case for changes in Delaware law as for the radical changes in banking laws in the 70s that preceded the hostile takeover boom, but there were some significant cases that expanded management to greater scrutiny for failure to evaluate alternative corporate takeover offers that management might not have favored.
But it is quite clear how much legal structures have shaped financial structures of corporate control in the US versus other countries. European companies, especially in Germany, were dominated by banks, while that particular source of capital was legally barred from management control in the US. The legal disabling of financial institutions from ownership stakes in corporations meant that for the decades after WWII, management faced an incredibly diffuse shareholder structure, empowering management to act without much check, except from other managements looking for other companies to swallow.
With the usury laws in place until the 1970s, it would have been impossible for someone like Millken to create high-interest junk bond instruments that could create alternative pools of capital to substitute for the banking capital barred from corporate control in the US. One of the best historians of law and corporate governance is Mark Roe at Columbia Law-- check out his "A Political Theory of American Corporate Finance" in the 1991 (Vol 91) Col. Law Review on that history.
-- Nathan Newman