Directors Responsibility

Market economy is the economy under the rule of law. The development of market economy can't be seprated from the protection of law. As the important subject and the microeconomic foundament during economy operation, there is important guarantee effect for the healthy development of the whole economy regulating corporation's organization and behavior according to law. With the development of economy and updating the concept of corporate governance, the role of the board is constantly reinforced, the function and power of director in the corporation's operation and management activities is increasingly expanding, so director become the key link in corporate governance. The moderate expansion of the function and power of director is beneficial for improving the efficiency of the corporation's operation. But if the function and power expand excessivly and the control mechanism is lack, the power will inevitably be abused, and the corporation, shareholders, creditors, will be harmed. So, in order to prevent abusing the power of director, implement the principle of "power corresponding to responsibility", effectively protect the benefit of the corporation, shareholders, creditors, maintain the economic order, it is very necessary to clear the obligation of director and strengthen the responsibility of director.The basic theory of the responsibility of director is the logical starting point of the article. According to the logic development of the topic, The article first elaborates the concept of director and the responsibility of director, the legal status of director and the obligation of director. Then the article analyzes the subjects that director takes responsibility for, and discusses the mechanism of finding out the responsibility, relieving the responsibility and remitting the responsibility. There are three parts in the article.The first part is the theory premise of the responsibility of director. In this part, the article defines the concept of director and the responsibility of director, and the connotation of the study objective become clear. On the basis of analysis and comparison, the article raises a new view about the nature of director's legal status. Through analyzing the loyal obligation and diligent obligation, the article raises some recommendations from the legislative point of view about how to improve the obligation of director. In this part, the obligation of director is a focus. The study about the obligation of director is a link between studying the legal stasus of director and studying the responsibility of director.The second part is the analysis about the subjects that director take responsibility for. According to the different subjects that director take responsibility for, the responsibility of director will be divided into the responsibility that director take responsibility for the corporation and the responsibility that director take responsibility for others. The article redefined the nature of the two types of the responsibility. The responsibility that director take responsibility for the corporation is "the responsibility prescribed in corporation law", and the responsibility that director take responsibility for others is also the responsibility prescribed in corporation law. Taking the nature of the responsibility of director as the theory premise, the article re-constitute their constitutive conditions. The constitutive conditions of the responsibility that director take responsibility for the corporation include: main body, violate the obligation, subjective fault, can't remit the responsibility. The constitutive conditions of the responsibility that director take responsibility for others include: violate law or the charter of corporation, others suffer, subjective fault, the causal link.The third part is the question of finding out, relieving and remitting the responsibility of director. In order to implement the responsibility of director and effectively protect the corporation and related subjects, perfect accountability system shoud be constituted. On how to find out the responsibility of director, the article elaborates corporation direct litigation, shareholder representative litigation, others direct litigation. There is tremendous risk in the business of corporation, in order to protect the benefit of director and the benefits of corporation and others, at the same time of strengthening the responsibility of director, it is necessary to make up the responsibility for the corporation or others when director causes losses during performing his duties. The main form of making up the responsibility is the director's responsibility insurance. The article discusses the concept and nature of the director's responsibility insurance, discusses the insurance coverage and how to undertake premium. At the same time, the system that remits the responsibility of director should also be constituted to balance the right and obligation of director. According to the foundational reasons, the article divide the system into types, one is remitting the responsibility by law, the other is remitting the responsibility by the constitution of corporation or the resolution of corporation, and analyze detailedly the specific application of the two mechanisms.