Restatement of the Law,

Corporate Governance

The Institute first tackled the subject of corporate governance more than 25 years ago in Principles of the Law, Corporate Governance: Analysis and Recommendations. Although it provided valuable guidance in a new and unfamiliar area of law at the time, this area has evolved quite a bit in the intervening decades. This project will examine the state of the law today and reflect it in the Restatement.
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    Tentative Draft No. 1
    Tentative Draft No. 1
    158 pages, 2022, #1RCGTD1

    TABLE OF CONTENTS

    Section                                                                             Page

    Project Status at a Glance ................................................. xiv

    Foreword ............................................................................. xv

    Reporters’ Memorandum ................................................... xvi

    Projected Overall Table of Contents ................................. xviii

    CHAPTER 1

    DEFINITIONS

    § 1.10.Controller ................................................................... 1

    § 1.23. Interested ................................................................. 7

    § 1.24. Independent ........................................................... 19

    CHAPTER 2

    THE OBJECTIVE OF A CORPORATION

    § 2.01. The Objective of a Corporation .............................. 25

    CHAPTER 4

    DUTY OF CARE AND THE BUSINESS JUDGMENT RULE

    Introductory Note ................................................................ 59

    § 4.01. The Duty of Care .................................................... 60

    § 4.02. The Business Judgment Rule ................................ 67

    CHAPTER 5

    DUTY OF LOYALTY

    § 5.01. The Duty of Loyalty ............................................... 83

    § 5.02. Interested Transactions Involving a Director or
    Officer ................................................................................ 87

    § 5.10. Interested Transactions Involving a Controller ..... 116

    Appendix. Black Letter of Tentative Draft No. 1 ......... 132

    Tentative Draft No. 1 contains Sections from Chapter 1, Definitions; Chapter 2,  The Objective of the Corporation; Chapter 4, Duty of Care and the Business Judgment Rule; and Chapter 5, Duty of Loyalty. The membership voted to approve §§ 1.10, 1.23, 1.24, 2.01, 4.01, 4.02, 5.01, and 5.10 of this draft at the 2022 Annual Meeting, subject to the discussion at the Meeting and editorial prerogative. This approved material may be cited as representing the Institute’s position until the official text is published.

    158 pages, 2022, #1RCGTD1E

    TABLE OF CONTENTS

    Section                                                                             Page

    Project Status at a Glance ................................................. xiv

    Foreword ............................................................................. xv

    Reporters’ Memorandum ................................................... xvi

    Projected Overall Table of Contents ................................. xviii

    CHAPTER 1

    DEFINITIONS

    § 1.10.Controller ................................................................... 1

    § 1.23. Interested ................................................................. 7

    § 1.24. Independent ........................................................... 19

    CHAPTER 2

    THE OBJECTIVE OF A CORPORATION

    § 2.01. The Objective of a Corporation .............................. 25

    CHAPTER 4

    DUTY OF CARE AND THE BUSINESS JUDGMENT RULE

    Introductory Note ................................................................ 59

    § 4.01. The Duty of Care .................................................... 60

    § 4.02. The Business Judgment Rule ................................ 67

    CHAPTER 5

    DUTY OF LOYALTY

    § 5.01. The Duty of Loyalty ............................................... 83

    § 5.02. Interested Transactions Involving a Director or
    Officer ................................................................................ 87

    § 5.10. Interested Transactions Involving a Controller ..... 116

    Appendix. Black Letter of Tentative Draft No. 1 ......... 132

    Tentative Draft No. 1 contains Sections from Chapter 1, Definitions; Chapter 2,  The Objective of the Corporation; Chapter 4, Duty of Care and the Business Judgment Rule; and Chapter 5, Duty of Loyalty. The membership voted to approve §§ 1.10, 1.23, 1.24, 2.01, 4.01, 4.02, 5.01, and 5.10 of this draft at the 2022 Annual Meeting, subject to the discussion at the Meeting and editorial prerogative. This approved material may be cited as representing the Institute’s position until the official text is published.