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Studies On Business Judgement Rule

Posted on:2006-01-16Degree:MasterType:Thesis
Country:ChinaCandidate:Y HongFull Text:PDF
GTID:2166360155463182Subject:Civil and Commercial Law
Abstract/Summary:PDF Full Text Request
This article is to study on Business Judgement Rule(BJR),This article is divided into three parts.The first parts studies on the basic theories of BJR;The second part analyses and evaluates the several typical application of the BJR;The third part studies on how to transplant BJR smoothly and comfortably.Part 1 discussed reason,evolvement,application conditions,significance and relation between BJR and duty of care.BJR is applied to determine if directors have acted properly, and satisfied the three basic duties. Not all decisions of directors will result in benefit to the corporation. As a result, directors will be personally liable for loss to the corporation only if the elements of the BJR defense are not satisfied.The emergence of BJR is determined by three factors.First is the unprediction of business venture;Second is lack of capacity of directors;Third is the need of balance between corporation and directors in rights and liability.Case law is the origin of BJR.with the development of BJR,positive law is becoming more important.In particular,several elements such as subjective factor,are heading for perfection.Part 2 discussed how to apply BJR in special environment.Although BJR is becoming more and more consummate.,some special problem still need to settle down,such as nominal director and idle director.According to the balance between director and corporation, the nominal or idle director should take on the duties of compensation,and can't be exempted by BJR.In addition,when we need give judicial review to the director's action,we should find a clear division between corporation's decision-makers judgement and judicial judgement.As result of determination inrang,it not only can benefit the need of judicial review,but also guarantee the free right of management.Part 3 discussed how to transplant the BJR to China in continental legal system.First of all,we analyse the environment from legislation,theory and practice,though corporation legislation lags compared with U.S corporation law,many theoretician are thirst for transplanting BJR and building system of duty of care.At the same time,some companies write BJR into their constitution.Above elements pave the way for the transplanting.Sencondly,we analyse the obstacles if we transplant BRJ from two aspects.In conclusion,the difficulties mainly concentrate on legislation background and inbalance between directors.Finally,we give some suggestions about designing appropriate discipline,they include regulating directors' business judgement ability in corporation constitution;build interior investigation institution to judge director's decision and execute information-open discipline insuring director make right decision at the base of sufficient information.
Keywords/Search Tags:Business Judgement, Duty of Care, Corporation Governance, Case Law
PDF Full Text Request
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