Directors Obligations

With increasingly separating of capital ownership and capital running, executive centralism is becoming the main trend. As a result, the power of the Board of Directors and directors is extending. To the contrary, the power general meeting is weakening. In order to prevent directors' abusing their power from damaging the interests of company and shareholders, the duties and responsibility of directors should be strengthened. It is also one of trends of the developing of company law in the world nowadays. As to our country, rules of directors' duties made in Company Law still can't meet the requirements of the times. It is necessary to draw lessons from legislation of foreign countries to strengthen directors' duties and responsibility.Basically speaking, directors' duties are born of legal relationship between directors and companies. But there are different opinions on what kind of legal relationship can be the theory basis of directors' duties. As to it, there are agency doctrine and depute doctrine, etc. in continental law system. And there are trust doctrine, depute doctrine, special relationship doctrine and agency and trust doctrine, etc. in common law system. Legal status of directors hasn't been stipulated definitely in law of our country and there isn't a uniform opinion about it. It is suitable to take "depute doctrine" as the theory basis of directors' duties in our country from the angle of the basic theories of civil law and legislation of our country.Directors' duties can be divided into duty of care and duty of loyalty. Firstly, determination standards of directors' duty of care and responsibility should be borne for violating directors' duty of care are studied in the paper. Determination standards of directors' duty of care consist of subjective standard and objective standard, which have some drawbacks. It is the best way to use objective standard as principle meanwhile use subjective standard as supplementary to determinate directors' duty of care. If directors fail to fulfill the duty of care, they should be responsible to the company for civil compensation. Subjects who can raise alawsuit on behalf of their companies to investigate and affix the responsibility of directors are stipulated in company legislation in the two law systems. Too heavy civil compensation responsibility is possibly unfair to directors and it is not beneficial to companies in any case, so it is necessary to restrict it appropriately. Then concrete manifestations of directors' duty of loyalty and responsibility should be borne for violating directors' duty of loyalty are studied in the paper. Main manifestations of directors' duty of loyalty are the following aspects: directors can not benefit from their status; it is forbidden to use one's power to accept bribes, some secret interests or other benefits promised; it is forbidden to appropriate and deal with property of their companies without authorization; it is forbidden to reveal secrets of their companies; it is forbidden to run competing business; it is forbidden to deal with their companies without legal process; it is forbidden to appropriate corporate opportunities. When directors violate duty of loyalty, civil liability is a combination of liability for tort and unfulfilling obligation. Forms of taking responsibility of directors are different in various concrete manifestations for various manifestations of duty of loyalty, although subjects who can represent their companies to raise a lawsuit to investigate and affix the responsibility of the director who violates the duty of care are the same as subjects who can raise a lawsuit to investigate and affix the responsibility of the director who violates the duty of loyalty. Finally, legal status of directors' duty of care and duty of loyalty is studied in the paper. Directors' duty of care and duty of loyalty stress on different contents and constitutive requisites of responsibility for violating them are different. The relationship between the duty of care and business judgment rule and the relations...