Research On The Obligation Of Non-Competition Of Directors

Obligation of Non-Competition of Directors, one of the main duties of directors, is a major issue in the modern corporate governance structure, due to the importance which many countries set detailed stipulations in their laws and statutes.In the new revised Company Law of China, this kind of duty of directors has been mended greatly. But it is still too general of contents, arousing difficulty in practical application. This article, through comprehensive scrutiny on legal principles and systems in the international community, probes both the intrinsic meaning and vital significance of non-competition obligation of directors and try to detect the weakness of the non-competition system in China, hoping to promote the advancement by learning from forerunners abroad.This article is divided into three parts. In Part 1, the author mainly discusses the definition, the academic foundation, and the value of obligation of non-competition of directors. In Part 2, through comprehensive scrutiny on legal principles and systems in the international community, the author discusses how to judge if directors have violated this duty and the exceptions. In Part 3, the author mainly discusses what responsibilities the directors should take if they violate this duty and put forward some suggestions for the perfection of the legal duty in China.