A Study On The Civil Responsibility Of Independent Director

The reason why the independent director system was introduced into China, is mainly to solve the problem:the insiders take control of the company and big shareholders maneuver it. However, the past decade practice of the independent indirector system shows that the effects of its implementation was not expected. So the author thinks that in addition to the imperfection of the environment for corporate governance in China, one of the important reasons lies in the serious lack of the design and performance. What's worse is that the relevant regulations on civil liability of independent directors fall short. So far, there is much shortage and defficiency in legislation and theory in respect to civil liability of independent director. The author makes an attempt to do certain research on the independent director's civil liability on the basis of analyzing the present situation. As is well known, the external nature of the system resulted in the dilemma in the aspect of imposing legal duty on the independent directors. Therefore how to establish reasonable guidelines and adapt truly to the independent directors, which is distinguished from civil liability of non-independent director, is of great significance and value. The following goes like this:The first part maily introduces the basis of civil liability of independent directors, independent directors need to undertake three core civil obligations:Duty of care, Duty of loyalty, and disclosure obligations.The second part discusses the significance of the establishment of independent directors and principles of civil liability, which includes two aspects:First, make a brief analysis of the significance of establishment for the system, pointing out the establishment for the sake of perfecting the system to maitain equity and justice of law. Then improve the governance of listed company in order to meet the demands of small shareholders'interest. Second, introduction to three principles of establishing independent director's civil liability, that is, duty line with commitment, risk in line with reture and distinction with on harshness.The third part is about the remark on the civil liability of independent directors in detail. The duty that the independent director undertake is for the company and the third party. Most of all the nature of the liability and the principle of attribution liability are put more specific analysis. At the same time the scope of the third party is also defined as with the civil liability of independent director for the third party.The fourth part introduces the limitation and exemption of the independent directors'civil liability separately. Firstly the rule of civil liability on independent directors in common law and principle of operating judgement. Then sort out the contents of exemption for the independent directors'civil liability adopted throughout the world.Finally, there is a summary of this article, in the near future, with the further improvement of company legislation, and judicial practice experience is constantly sumed up, independent director system in Listed Companies in China will eventually play its due role.