The Study On Independent Director's Civil Liability In China

Nowadays in the structure of modern corporate governance, proprietorship and power of operating are widely disjunctive. Inside directors and senior managers even rich shareholders are controlling corporate in practice. The corporate, middle and little shareholders'benefits are in danger of being greatly damaged. This phenomenon is much serious in the listed companies of our country. Therefore independent director institution has been introduced these years to improve corporate governance. But till now, concerning law on independent director is incomplete. We do not have systematic regulations on independent director's civil liability and limitation regulations on independent director's civil liability stay in vacancy. This paper tries to probe from the angle of substantial law and legal practice so as to propose some advice on concerning legislation to independent director's civil liability in future. The paper is divided into three chapters, totally about 31,000 words.Chapter 1 probes the basic theory on independent director's civil liability and expounds value and importance of independent director institution.Chapter 2 discusses on how to realize independent director's civil liability. At first, the author gives a review on independent director's civil liability. The author also analyzes particularity of independent director's notice liability and suggests that relative civil liability should be added when independent director idles about his notice liability. Then the author expounds from the angel of post qualification and appointment to present precondition of independent director's undertaking civil liability. The author points out that"rich shareholder's evasive institution"can be used to keep independent director's independence. The author finally probes how to investigate and affix independent director's civil liability from 2 aspects. The first aspect ascertains to whom independent directors should undertake his civil liability. The second aspect analyzes that current Chinese law uses fault deduction liability principle to confirm independent director's civil liability.Chapter 3 introduces limitation and insurance institutions for independent director's civil liability. The first part of this chapter dissertates concerning theory on limitation of independent director's civil liability. Then expounds the method to limit independent director's civil liability throughout the world and analyzes the reason why independent director's civil liability should be limited in our country. Finally this part proposes some advice on legislation of liability limitation for independent director. The author suggests that there should be proper procedure and precondition when limiting and relieving independent director's civil liability. The corporate can limit or relieve independent director's civil liability by exercising"Business Judgment Rule"when he breaks the notice liability or law-abiding liability but has no serious defect or not intent and has no improper benefit. The judge can apply"Business Judgment Rule"to limit or relieve independent director's civil liability when he breaks the notice liability or law-abiding liability to investors but has no serious defect or not intent and has no improper benefit. The second part of chapter 3 dissertates to set up insurance institution to limit independent director's civil liability.