The Research On Director's Duty Of Care

With the expansion of power of directors and the board of director,"the board of direct oriented principle"in the company operation pattern has been the fact that is not struggled. In order to promote the director to fulfill the duty and responsibility to the company and prevent abusing the authority that law and articles of association entrusted, the company in various countries has strengthened the director's duty and the responsibility through legislation, particularly in Britain and America, which has clarified the director's duty and responsibility. Generally speaking, the duty of the board of directors shall include two aspects that are the duty of loyalty and the duty of care. The duty of loyalty refers to that the board of director must place the company's best interests in the first place in corporate business and putting private interests above the company's interests is strictly prohibited. Specifically speaking, the board of directors shall not divert the company fund; disclose the company's confidential information and conduct the business with the company etc. The duty of care usually requests the board of director to exercise attention of reasonable person who should achieve in the same position and the situation. Further, such standard also constituted the reasonable anticipation of company's shareholder to the board of directors. According to MBCA, if the fulfillment of the duty have achieved the following three standards, then the board of directors have reached duty of care:(1) in good faith; (2) behaving as a common person under the similar situation to fulfill the duty; (3) adopting the best way to benefit the company most.On the contrary, the regulation regarding the director of company law in China is quite rough, further, too many regulations on director 's faithful duty and few stipulations on duty of care. Although new company law makes the regulations on"assiduous duty"(meanly the duty of care) for first time, it lacks of the detailed regulations, and effective judgment standard to judge whether the director have reached the duty of care or not. Therefore director who violated the duty can not be investigated for legal responsibility due to the absence of the detailed judgment standard. Therefore, it is more difficulty to determine the violation of the duty of care than that of the duty of faith, which is not good at benefiting of company and shareholder obviously. Further, many losses in China is not the result of director's violation of the regulations, but the result of the error decisions with an improper method (for example blinding investment). Therefore we must stipulate the duty of care carefully.This article, mainly adopting the approach of comparison research, in view of the insufficiency regulations regarding the duty of care of director in Chinese company law, introduces two legal systems and some company law on the duty of care of director of main countries, then proposes which are is suitable and which is not bases on our practice. Besides the two parts of introduction and the conclusion this article is composed of four parts: The first chapter discourses upon the elementary theory to the duty of care, analyzes the foundational relationship which is the duty produced and the relational question, then limits the content of the duty of care and discriminates the two duties. The second chapter elaborates two countries legislation and the judicial practice regarding the duty of care to directors, mainly from the duty judgmental standard, the scope comparative analysis respective characteristic and have made the summary. The third chapter mainly elaborated the relations between the duty of care and the Business Judgment Rule, introduces the summary of major points on the relationship. The fourth chapter analysis above content generally, in view of the insufficiency in our company law on duty of care, makes the discussion to establish and consummate legal system of the duty of care of directors. The proposal is made that we should explicitly stipulate legal relationship between the director and company, the judgmental standard and the scope of duty of care on director, then draws reference from the Business Judgment Rule and consummates the civil liability system to directors when violates the duty of care and so on.