Discussion On The Duty Of Care Of Directors

As the economy growing, the complexity and diversity of commercial behavior are becoming increasingly evident, need for more professional personnel involve in the company's daily business activities. In this way,the power of board of directors and directors are expanding which results the management mode of modern companies has transferred ftom"shareholders general meeting-centered"to"board of direetors- centered". In order to enable the directors of the company duediligence,to prevent the directors abuse the authority which the laws, regulations and articles of association give, various counties strengthen rule of direetor's duty of care and responsibility. Especially in common law countries,they research the areas of the company more than a century, during the years of judicial practice, the legal system relevant obligations of the directors has been relatively improved, the content of directors duty of care and whether directors perform the determining standard of relevant obligations has a clearly defined or a detailed caseanalysis. While many provisions of civil law countries are more abstract,but the director's duty of care are in the general terms in their statutory .Relatively, China's Company Law for the director's duty of care are thinner, the director's diligence obligations are mentioned for the first time in company law, whether"the director's diligence obligations"is consistent with legislative intent isn't proposed,subsequently don't explain what is meant by the director's diligence obligations, how to define whether a director has reasonable and appropriates to fulfill the obligation, how to to bear the responsibility when the a director breaches the obligation, the most important thing is which lacks an effective standard to measure whether a director has fulfilled his dutyof care.Currently,the judicial practice in China,todetermine whether a director has fulfilled his duty of loyalty is better recognized, and due to lack of corresponding provisions, to determine whether a director has fulfilled his duty of care is difficult to operate in the judicial practice, which is clearly not conducive to protect the legitimate interests of companies, shareholders, other interest groups. Many of the company's loss is not due to a director's violation of the laws, regulationsors or articles of association, but because of the directors'negligence in the operation and management activities,therefore,that the director's duty of care clearly defined in legislation is the necessary.This thesis aims at diseussing the deficiency of the director'duty of care in the new"CorporationLaw"of our country and providing some suggestion about amending Chinese corporate legislation mainly through comparative analysis and combines the corporate legislations of common law countries and that of eivil law countries, paying adequate attention to Chinese reality. The author believes when we research on the director's duty of care, first, there is a need to clarify the content of the directors'duty of care to be distinguished from other legal systems. Second, criteria for determining directors'duty of care should be clearly defined, Setting this system is to enable directors to fulfill their related responsibilities better, Only clear criterion can make the whole system to judicial practice from the laws,at the same time, this is the only way to achieve the purpose of the system. Finally, the business judgment rule of the United States has need and feasibility with operations in China , criteria for directors'duty of care can distinguish with the accountability standards. This design not only help to clear the scope of directors'responsibility, but also help the directors to play their professional skills to achieve the best interests of the company when the market risk can't avoid, even though the company failed to obtain the relevant interest or a loss by the their legitimacy acts who are excused from legal action.