Research On Corporate Directors Duty Of Care

In modern enterprises, the board of directors becomes more and more important in the structure of corporate governance, and its control of the company has been continuously strengthened. Therefore, how to regulate the conduct of directors of the company becomes an important issue in the practice of the Company Law.Directors duty of care had already been written into the law of Common-Law System countries. However, China only regulated some part of directors duty of care while amending the Company's Law in the year 2005.This paper discussed four aspects of directors duty of care. Beginning with the meaning of the directors duty of care, Chapter I. introduces this concept and its difference from the duty of loyalty; then exposes the theoretical basis of directors duty of care, which mainly includes negligence theory, agency cost theory and the theory of the relationship with the corporate directors; finally defines the contents of directors duty of care through the following three parts, skills obligations, duty of care and diligence obligations. To sum up, this chapter explains why directors should have the duty of care.Chapter II describes the criteria of directors duty of care and which criteria have been taken in laws of most nations. Generally speaking, there are three kinds of criteria of directors duty of care: subjective criteria, objective criteria and a combination of subjective and objective criteria. The defects of the subjective criteria are too obvious while the objective criteria are too stringent which will also have some adverse effects. So taking the combination of subjective and objective criteria is more suitable for China's national conditions.Chapter III focuses on the civil liability of directors' breach of the attention obligation and its way of performing. Directors' breach of duty of care brings a violation to benefits of the company, the Shareholders and the third parties, while protecting the interests of the third party, in particular, the protection of the interests of claims in the modern economy has a very important significance. There are several ways to investigate the directors duty of care, the shareholders to stop the infringement claims, shareholder derivative lawsuit, shareholders direct action, creditors of the company's direct appeal and litigation in general.Chapter IV focuses on how to improve the relevant provisions of China's legislation in the directors duty of care. First of all, speaking of the criteria of directors duty of care, a specific program design is proposed. Then, some proper recommendations are proposed accordingly in the aspect of the creditors'responsibility, the establishment of the directors'absence system, and that of the perfection of the absence of exemption system.Finally comes the conclusion, the criteria of the directors duty of care in the Law of Company of 2005 must be regulated; complete and perfect the content of directors duty of care in order to make the directors duty of care more legally feasible in laws of our country.