Discussion On The Duty Of Care Of Directors

During the resent years, the management mode of modern companies has transferred from "shareholders' general meeting-centered" to "board of directors-centered" which results in the weakness of power of shareholders of company and expanding of power of board of directors. Just like any other agents, when directors manage the company, they have to shoulder reasonable responsibility of care. If the directors do not bear this reasonable responsibility and thus induces damages to company, they have to bear legal responsibility for these damages of company. So settling this interest disputes through legislation, strengthening and standardizing obligations and responsibilities are very important. However, comparing with duty of loyalty, the duty of care of the directors to the Company is a less one. Because practice has improved that if the directors are imposed too strict attention to the duty of care and legal duty, the leadership of the directors is a too onerous burden for the companies, and company directors are not conducive to the mobilization of the positive management of the company.In this paper, based on the analysis on duty of care of directors, we discuss the deficiency of the relevant provisions of The Company Law of the Peoples' Republic of China. On the duty of care of the directors, after making corresponding recommendations through programmed design, we believe that, it is feasible to achieve efficiency and equitable balance purposes when treating the duty of care of directors. Therefore improving and standardizing the directors' duty of care is of great significance.The text consists of four parts and its outline is written as follow:First of all, this paper summarizes the basic theories of directors' responsibilities of care. Then bring forwards the stipulations and limitation of The Company Law of the Peoples' Republic of China. Afterwards the paper researches on the duty of care of directors, then put forwards the related countermeasures.