Vanderbilt Law Review


Kathryn N. Fine

First Page



Much of the debate concerning corporate governance centers on the American Law Institute's proposed Principles of Corporate Governance [hereinafter ALI Proposals or ALI Principles].' The "restate" the law of corporate governance without departing from the primary goal stated in the ALI's charter: "to promote the clarification and simplification of the law and its better adaptation to social needs."' The ALI Proposals, however, have evolved into a"new art form"' and, unlike a restatement, have proposed reforms in addition to codifying the common law. Because of the predominance of statutory corporation law, the ALI Proposals have focused selectively on those areas that usually are governed by common law. The ALI Proposals have seven parts: (1) Definitions; (2)Objectives and Conduct of the Business Corporation; (3) Structure of the Corporation; (4) Duty of Care and the Business Judgment Rule; (5) Duty of Loyalty; (6) Transactions in Control; and (7) Remedies.'