The Obligation And Responsibility Of The Board Of Directors

The organs of company include shareholder meeting, and directorate. Directorate occupies the most important position in the organs of company. To encourage the directors to manage the company and earn more profit, and also to prevent them abuse their right, on the one hand the company laws in many countries endue the directors with more rights, on the other hand they also prescribe obligations of them.By reviewing the history of the company system in China and the status in quo of legislation, we can find that the laws do not prescribe the duty and obligation of the directors definitely and reasonably. And in practice, it is very serious that the directors abuse their rights. There is so much status that the directors are very rich, but the corporation is very poor especially in state-owned corporation. Therefore it is a great practical signification that how to restrict the directors, how to find out the directors who injure the interest of the company and the third party.Based on the situation of our company legislation and the reference of the laws in other countries , this article studies the obligation and the civil duty of the managers of the company—directors.The first part is the analysis of the foundation that the directors undertake the duty and the obligation. To define the obligation and the duty of the directors, we should define the their foundation at first. So it is necessary to know the definition of the directors, the qualification of the directors and the relationship between the company and the directors. Based on the research of the views and practice of other countries, this part gives a clear idea about the definition and the qualification of the directors, and it also gives the opinion of the author about the relationship—procuratory.The second part is the expatiation of the obligation of the directors. This part is the core of this article and it is divided into two parts—obligation of diligence, care and skill and obligation of faith. The author discusses upon the modality and the representation of the two duties and expatiate their legal connotation by combiningthe legislation and the practice of foreign country in this part. The author also analysis the deficiency of the present legislation and practice in China and imagine the future legislation.The third part is about the duty of the directors. On the spot of modality of the directors' duty, it can be divided into the duty to the company and the duty to the third party. On the base of analyzing the duty of directors, this part discuss the legal foundation of the two duties that the directors undertake, the types of undertaking the duty and the prescript and the perfection to our legislation.