I. PART VII, CHAPTER 1: THE DERIVATIVE ACTION
Nothing in The American Law Institute's. . . Principles of Corporate Governance: Analysis and Recommendations... proved more controversial than the effort to develop fair and balanced standards for the derivative action. Only the topic of corporate takeovers seems to evoke an equally intense level of emotion among corporate lawyers. Not surprisingly then, Part VII (Remedies) of the Principles attracted the same attention from critics that a lightning rod does in a thunderstorm.
Indeed, the lobbying and scrutiny visited upon the American Law Institute's ("ALI") work on the derivative action from the various interest groups and academic critics rose to a level normally reserved for congressional legislation. This remedy occupies more than half of Volume 2 of the two volume set of the ALI Principles of Corporate Governance ("Principles"); much of this space is devoted to explanations of carefully compromised text.
By stark contrast, the Official Code of Georgia Annotated ("O.C.G.A.") devotes only nine sections directly to the remedy, one of which contains definitions and one of which applies only to foreign corporations.
Marjorie Fine Knowles and Colin Flannery, The ALI Principles of Corporate Governance Compared with Georgia Law—Continued, 48 Mercer L. Rev. 1 (1996).