By me kings reign, and princes decree justice.
Lady Wisdom speaks. She is the first person pronoun here. Solomon is in the middle of a personification of wisdom (Pr 8:1-36), and she is teaching that good kings and princes must have her, as the righteous execution of their offices depends upon her.
A king without wisdom is an oppressor, for he needs wisdom to justly guide his rule of a kingdom (Pr 28:16). Many kings have reigned without wisdom, but they were not good kings; many princes have decreed laws, but they were not good or righteous laws.
Solomon is writing about godly and righteous kings, like he and his father. When he says it is an abomination for kings to commit wickedness (Pr 16:12), he is only describing good kings, for many kings have been very wicked. He writes of true wisdom for godly kings.
Our proverb has an ellipsis - missing words implied by the context and easily understood by careful readers. The missing word is supplied in the second clause, justice. Solomon in the first clause is not teaching about just any kind of king; he is writing of good kings who rule justly and rightly by wisdom and discretion. Good kings must have wisdom.
Solomon proved himself such a king by ruling a baby be divided in two with a sword (I Kings 3:16-28), for only great wisdom and discretion could solve the harlots' dilemma. And he had sought this understanding carefully in the beginning of his career, for he had been taught the importance of true knowledge and counsel (I Kings 3:7-9).
Wisdom is so important for ruling that a poor child with it is better than a rich old king without it (Ecc 4:13). Wisdom can make up for limitations, so seek it (Jas 1:5)! And this applies to every husband, father, master, magistrate, and pastor who wants to rule well.
Wisdom teaches kings the importance of many things: punishing the wicked (Pr 20:8,26), mercy and truth (Pr 20:28), faithfully judging the poor (Pr 29:14; 31:8-9; 24:11-12), good men with gracious speech (Pr 14:35; 16:13; 22:11), and searching out matters (Pr 25:2). And wisdom teaches kings to avoid many things: gifts of bribery (Pr 29:4), wine and strong drink (Pr 31:4-5), gluttony (Ecc 10:16-17), lies (Pr 17:7; 29:12), and wicked counsellors (Pr 25:5).
There is no king like the Lord Jesus, Who executes judgment and justice in the earth, and earned the title, THE LORD OUR RIGHTEOUSNESS (Jer 23:5-6). He is called Faithful and True (Rev 19:11), for He rules by His great treasures of wisdom and knowledge (Col 2:3). David at death prophesied of this Son he had not yet met, One Who would rule justly over men in the fear of the Lord (II Sam 23:1-5). Do you know Him, dear reader?