On Directors' Obligations And Remedies For Related Entities' Interests In Corporate Philanthropy

Corporate Philanthropy, as part of Corporate Social Responsibility, has been legally supported and encouraged. It has been proved that reasonable corporate philanthropy is not only conducive to the development of social welfare, but also conducive to establishing a good image of the company and its long-term development in practice, in line with the interests of shareholders and creditors. However, many problems have arisen in practice. On the one hand the modern corporate governance structure gives the directors broad powers and on the other the current laws lack effective regulations on corporate philanthropy, which will make the directors make unreasonable donations or even seek personal gains at the expense of the company, shareholders and creditors. This is contrary to the fundamental attribute of the company, namely profit-making, and is not conducive to the sustainability of corporate philanthropy.Although corporate philanthropy is one of the means for modern corporations to take social responsibility, it is only a moral responsibility after all. When making philanthropic donations, the directors should take account of the interests of the corporation, shareholders and creditors, and make reasonable donations. Therefore, it is of great significance to study what obligations the directors should carry out when making donations and how to remedy the loss the unreasonable donations brings to the corporation, shareholders and creditors. This thesis analyzes the above questions and tries to find the answers to them from the angle of company law, contract law and bankruptcy law. Finally, according to the advanced legislative experience in developed countries and basing the real condition in China, the thesis sets forth the different remedies for the different occasions to solve the above questions in the corporate philanthropy in China.The thesis consists of four parts in total. The first part is an introduction, which introduces the background of my choice item, basic content and thoughts of the thesis. The second part mainly sets forth the obligations the directors should carry out in corporate philanthropy. Firstly it analyzes the basis of legal theory on which the directors should have duties in corporate philanthropy, then explains Duty of Loyalty and Duty of Care in detail the directors should have in corporate philanthropy, especially on the aspects of the reasonable amount, objects and purpose of the donations. The third part discusses the remedies for the inner entities in corporate philanthropy, including the remedies for the corporation and the shareholders after the corporate philanthropy brings loss to them. It also analyzes the responsibilities the directors should take after they fail to fulfill their duties, and give some suggestions to improve the related system through the analysis of the drawbacks of the legislation in China and relevant advanced legislations in foreign countries. The last part discusses the remedies for the interests of the creditors. Firstly, it separately sets forth the creditors'and bankruptcy administrators' revocation of corporate philanthropy from contract law and bankruptcy law, and then discusses the responsibility the directors should take for the creditors. At last, according to the legislative experience, it puts forward some suggestions to perfect the system through the analysis of the disadvantages of our country's current provisions about the remedies for creditors' interests.