Legal Transplants, Law Books, and Anglo-American Corporate Fiduciary Duties

Abstract

This article explores legal transplants and divergences in Anglo-American corporate fiduciary law. The internal management rule in English law acts to restrict judicial interference in corporate governance disputes. It is conceptually similar to the business judgment rule but the two remain distinct. This article explains why Anglo-American corporate law developed differently, despite its shared roots. It pinpoints the origins of the internal management rule to Lord Lindley’s work, which was written in the late nineteenth century. Lord Lindley was central to the development of corporate law in England and other common law jurisdictions within the British Empire but his jurisprudence was not influential in the United States. By this stage in the nineteenth century, the body of American scholarship was sufficiently well developed. Lindley’s text, despite its failure to stimulate American doctrinal development, was well read in the United States. Even so, judges and corporate lawyers in the United States took their inspiration from English law at the time of the founders.