On Corporate Managers' Legal Status

Corporate managers are important components of corporate governance. With separation of ownership and management , as well as Managerial Revolution, corporate managers play crucial roles in corporate management. Their power tend to expand and usually surpass the legal frame incurring too much agency cost. It is significant to expound corporate managers' legal status.On the basis of relevant material in legislation, practice, theory on the science of economy, administration and law, through thorough observation and study by positivism, comparison, valuation and jurisprudent ,logic analysis, the thesis tries to clear corporate managers' legal status ,and to further the legislation on corporate managers in China.The thesis consists of five chapters with about 45,000 words:Chapter I: This section involves the theoretical and practical background for corporate managers. With separation of ownership and management, corporate managers are in the front line of business and management. Their power tend to expand and to be abused. This is so-called "Managerial Revolution" .Because of the limitations of the capital market and managers' market, to define corporate managers' legal status and to dispose their rights, duties and obligations accordingly are necessitated.Chapter II :The thesis probes into the different conceptions of countries of civil law system and common law system . Three types of legislation mode about corporate managers are also touched upon. The conceptions and legislation modescan illustrate different economical, cultural background and different jurisprudence.Chapter III:The thesis analyzes first the multiple roles the corporate managers play: corporate employees, (corporate) agents,(corporate) organ, and then the multidimensional legal relationships the managers have with the stock-holders, the corporation and the corporate bodies, pointing out that the managers are quasi-agents of shareholders, their functions are divided functions of the board of directors to improve efficiency of business execution and should be accompanied by the right to act as the corporation. The topic of concurrent post of a manager and director is further discussed. Managers' power should be supervised by the board of directors and the board of supervision.Chapter IV.'The thesis discusses the corporate managers' rights, duties and obligations which should be embodied in their legal status. First, the managers' rights are agent power in nature. It also has its peculiarities under corporate governance and manifests management power and representative power which are governed by the corporate law, charter and bylaws, contract, etc. Then the managers have duty of care and duty of loyalty. And their obligations are provided for by law, not only to the corporation but also to the third parties.Conclusion : A conclusion is drawn on the main contents and the key ideas. The section also probes into the legislation on corporate managers and the according practice in china, and presents some ideas for corporate "Insiders' Control".In this thesis, the writer holds that the corporate managers' multiple legal roles and relationships must be defined. In corporate governance, managers' power, an agent power in nature, becomes a component in the frame of the corporate power system. That is power to execute corporate business, divided from the functions of the board of directors. Managers' power, accordingly, should be not only governed by agent law, but also checked and supervised in corporate governance. And corporate managers should enjoy the status of a corporate body and corporate representative. Equitable disposition of managers' rights, duties and obligations is necessitated to lessen transaction cost and agencycost. The thesis also approves Chinese general managers' power stipulated andspecified by the corporate law.