61 Geo. Wash. L. Rev. 1034 (1992-1993)
Independent Directors and the ALI Corporate Governance Project

handle is hein.journals/gwlr61 and id is 1042 raw text is: Independent Directors and the ALI
Corporate Governance Project
Stephen M. Bainbridge*
Introduction
In his classic work, The Modern Corporation and Private Property,
Adolf Berle demonstrated that most publicly held corporations are
characterized by a separation of ownership and control.' Because
no single shareholder owns enough stock to affect corporate deci-
sionmaking, the firm is effectively controlled by its managers.2 Un-
checked, management may abuse its control by benefiting itself at
the expense of the shareholder-owners.3 Virtually all subsequent
corporate law scholarship has focused on the extent to which corpo-
rate law ought to prevent management from doing so.
Is it not an interesting coincidence that Tentative Draft No. 1 of
the American Law Institute's (ALI) Principles of Corporate Governance
(Principles)4 was published during the fiftieth anniversary of Berle's
work? Is it not equally striking that the ALI's membership finally
approved the Principles5 during The Modern Corporation's sixtieth anni-
versary? These coincidences were perfectly appropriate, given the
* Associate Professor, University of Illinois College of Law. B.A. 1980, Western
Maryland College; M.S. 1983, J.D. 1985, University of Virginia.
1. ADOLF A. BERLE, JR. & GARDINER C. MEANS, THE MODERN CORPORATION AND
PRIVATE PROPERTY (1932).
2. Id. at 84-89.
3. Id. at 121-22.
4. AMERICAN LAW INST., PRINCIPLES OF CORPORATE GOVERNANCE AND STRUCTURE:
RESTATEMENT AND RECOMMENDATIONS (Tentative Draft No. 1, 1982) [hereinafter Tenta-
tive Draft No. 1].
5. AMERICAN LAW INST., PRINCIPLES OF CORPORATE GOVERNANCE: ANALYSIS AND
RECOMMENDATIONS (Proposed Final Draft 1992) [hereinafter Proposed Final Draft].
April 1993 Vol. 61 No. 4

1034

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