The Civil Liability Of The Directors, Be Investigated

In the modern corporation system, directorate and directors occupy the unique position within the corporate structure. Because of their broad powers of management, it is very important to establishing and improving the system of compensation of directors, in order to prevent abusing director power and to protect the legal rights of corporation, shareholder and related third party. Accordingly, this thesis are analyzing and discussing this system, proposing some suggestions for some concerned problems.Firstly, compared with the international legislative modes, this thesis introduces the election of director and his delegacy, considering that the board of director, which consist of directors, as not only a regular department but a delegate of corporation, can routinely consider a variety of business matters. In the relationship of a director to the corporation, after analyzing and discussing the viewpoints of three kinds of theories: trust theory, agency theory and commission theory, the author point out that, the relationship between director and corporation is a legal official agency which based on the corporation authorization and the act of declaration of intention.Secondly, the duties of directors, as the basis of the system of compensation of directors, may be divided into two broad categories: a duty of care and a duty of loyalty or , as it is sometimes phrased, a duty of "fair dealing". There probably are different standard of director duty of care in different countries, but the common standard of duty discharging are: (1) a duty of exercising care in administering the corporation; (2) in good faith; (3) with the degree of diligence, care, and skill which ordinarily prudent men would exercise under similar circumstances in their personal business affairs. The content of care duty consist of law-abiding, conscientious, no exceeding his authorities and in good faith business judgment of the best interests of the corporation. The duty of loyalty may be divided into four aspects: (1) a director must act honestly; (2) prohibition against the conflicting interest transactions. In fact, whole prohibition of connected transaction is impossible; for sometimes connected transaction may be profit. But all the information about the connected transaction should be authorized and disclosed. (3) Prohibition against the competing with corporation. Director should discharge this duty unless the corporation permitted the competing, even in a certain time after his demission. The corporation can regain the opportunities or the interest; (4) The basic test established by modern cases as to when an opportunity is a corporate opportunity combine a "line of business" test, and if an opportunity is within a corporation's " line of business", it may be regained by the corporation. But the directors may also take advantage of a corporate opportunity if the corporation is incapable of taking advantage of the opportunity; of course, the utilizing of corporate opportunity must be discovered and permitted by the corporation.Thirdly, the compensation for corporation may be divided into two broad categories: the compensation for corporation and the compensation for the third party . The compensation for corporation is mainly the liability for breach of contract, besides it , the liability for tort is also important. In the principle of imputation, the Corporation law established the negligencism as a main principle, and the non-fault liability as an exception on the ground of "three capital principle". The essential conditions of the compensation liability are: (1) for breach of the director's duty to the corporation, e.g., simple breach of duty, lawbreaking, or action is in violation of articles of association, decisions of shareholders meeting and directorate; (2) for acts should be the act of duty related to the corporation's business; (3) bring on losses to the corporation, the losses includes direct losses , the losses of third party and its results in the corporation's inte...