Studies On Business Judgement Rule

The modern business world is capricious and the market chance goes by in theblink of an eye, so only with highly efficient operation, the company can rema ininvincible in this competitive society. For that purpose, the law must support powerfulguara ntee the directors who have perform their duties in good faith. Therefore, aprinciple of case law (Business Judgement Rule) has been produced in the Americajudicia l practice whose purpose is to judge whether the directors have perform theirduties or not. According to this rule, we can't pursue their duties if the directors'behavior is considered to be reasonable and diligent, even though harms thecompany's interest. This rule can use for reference to the protection of director's rightson the background that new Company Law gradua lly enhance the protection ofshareholder's interest. Basis to this respect, this paper briefly introduces some releva nttheories and brings forward some reference to our Company Law.As for this paper's foreword, the author expla ins that we need to protect thedirectors'lega l rights as well as prevent their power-abusing, so we can't attributesome uncertain risks to them through the first case of improper performing duty inHaidia n section. Though, the Business Judgment Rule of America's Company Law hasbeen further explored in order to solve this problem.The first chapter is to introduce the basic theory of the Business Judgment Ruleon the ground of America's Company Law. The first section expla ins the definition of the Business Judgment Rule from the angle of America's Company Laws'scholarship,judicia l practice and the statute's trend; The second section analyzes the academicfoundation and realistic foundation from the angle of releva nt Civil Law's theory,economics theory, director's operating rights and the relationship between the marketand the justice; The third section introduces the appropriate condition of the BusinessJudgment Rule; and the last section discusses the relationship between the BusinessJudgment Rule and directors'duties.The second chapter ma inly introduces the function of the Business JudgmentRule in the Company Law's practice and how does it work in derivative action broughtby shareholders and in company's merger.The third chapter is the reference to our country's Company Law. The firstsection shows the necessity that our country imports the Business Judgment Rule fromthe angle of company's ma nagement structure, the system of shareholder's derivativeaction, directors'operating rights and the relationship between the fairness andefficiency; the second section proves this rule's feasibility by the academic support,the precond itions and foreign countries experiences; Considering company'sma nagement practice in our country, the third section makes out the obstacles that ourcountry carries out this rule now. In the end, the author brings forward somesuggestion on our country's importing the Business Judgment Rule.