On Director's Obligation And Perfection Of Legislation

With the acknowledgement of director's key position in company law, close attention has been paid to how to prevent director from abusing his power and to strengthen director's responsibility in market economy countries. It is especially significant for China to eliminate "Internal Person's Control" which exists in state owned enterprises with company system. China's Company Law provides a series of regulations about director's obligation, yet it is rough and delays to such a degree that various problems appear in operation. This essay draws lessons from Company Law of civil law countries and common law countries, and perfects the regulations of director's obligation of China's company Law.Divided into four chapters, this essay makes a thorough study into director's obligation and perfection of corresponding legislation. The first chapter, focused on the development of director's obligation system and beginning with administrative structure of a company, systematically summarizes the establishment and characteristics of director's obligation system both international and domestic as well as the formation and development of the system, expounding the importance of a simultaneous and coordinate growth of corresponding director's responsibility. The second chapter is a brief account on the legal status and obligations of a director. Two basic conclusions are drawn through a retrospective summary on director's status described by the two international law systems: one is the trustee of the company's assets; the other is the deputy of the company's management. Besides, through a research into the related domestic laws such as "Company Law". "General rule of Civil Law" and "Trust Law", twoother basic conclusions about director's status in China are drawn: the spokesman and the trustee of a company. Meanwhile, four points are concluded concerning director's obligations that are manifested in the following six aspects: a director cannot benefit from his standing; abuse of power to take bribes or accept secret or other kinds of benefits are forbidden; embezzlement or unauthorized disposal of the company's assets is prohibited; divulgence of the company's secret is not allowed; no deal with the company without legal procedures is permitted; usurpation of the company's business opportunities is interdicted. By reviewing the national conditions and the related laws of China, the third chapter induces Chinese current situation of director's obligation-abuse of power, and then clarifies the legal defects of our domestic system of director's obligation from three perspectives: lack of systematization and comprehensiveness, lack of necessary flexibility and feasibility. Finally, the forth chapter concentrates on legal conception of Chinese system of director's obligation. Through a study on both internal and external legislation and judicature, this essay make a brief exposition on perfection of director's obligation system, expecting a incorruptibility of directors and an amendment to the legislation.Four constructive proposals are put forward for perfecting director's obligation system of a company. Firstly, some additional stipulations should be established about director's obligation of administration. Namely, mutual restrain among directors should be legally regulated and expose of illegality or impropriety should be encouraged. Besides, a director is supposed to attend meetings held by their company regularly and state his own views. He/she has to, otherwise, shoulder a joint responsibility for other director's negligence. Secondly, regulations about director's obligation of faithfulness should be perfected. That is, using externalrelated legislation for reference, the implication of director's faithfulness is to be clarified through judiciary explanation or amendment procedures. Thirdly, regulations about director's obligation of prohibited competition should be perfected. To be specific, the scope of business that is prohibited is what jeopardizes that of the company; direc...