On China’s Directors Duty Of Diligence

Modern market economy and company system vary from minute to minute, rapid development, the company grasp of the market capacity has put forward higher requirements, but also enhance the company decision-making risk. In reality, most of the company’s rights by the board of directors to exercise the rights, which makes the board gradually expanded, the overhead of a meeting of shareholders rights, the shareholder meeting center doctrine to the centralism of board of directors. But the resulting problem is:as the company owners, shareholders will manage the company the right to the board of directors, directors can be in the best interests of shareholders and due diligence? In practice, the directors often use its special status and authority to seek illegitimate interests. To prevent the directors abuse of power is the most effective way to set the duty of diligence, thereby balancing rights. Make the director assumes duty of diligence and after a violation responsibility, prompted the directors in the obligations under the constraint of normal.This paper is divided into four parts, the first part of the duty of care of a general theory to explain, the second part of the comparative analysis on foreign obligations of the legislation system, and summarizes the experience, the third part of China’s" company law" on the duty of diligence in accordance with the provisions of the analysis, introduced the" company law of our country" legislation in the directors violates the duty of diligence, general liability, exemption from the liability for the deficiencies.The fourth part is the focus of this article, the author puts forward through the next few points in perfecting the directors obligations:first, the industrious industrious compulsory criterion establishment. Introducing the business judgment rule, balance the obligations of judgment standard. If make business judgment directors must meet the conditions to be considered him to be honest to fulfill the duty of diligence. Establish standard shall adhere to the principle that the width strict properly, the reasonable risk. Second, to establish the objective standard, subjective criteria supplemented by a comprehensive standard, which is generally cautious fellow directors use their knowledge and experience, in a similar position, similar related situation should pay attention to, if the board has the experience, knowledge and qualifications of the words was significantly higher than that of the standard of proof, the director is honest contribution to actually have all ability evaluation criterion. In third, the sound of directors’liability investigation system, namely the need for directors violates the diligence duty exemptions to be provided, in addition to the company law of our country about directors violates the duty of diligence responsibility provisions more words on the status, director liability limits. Fourth, from an economic perspective, how to make the management companies like running their own companies as shareholders consider the issue, which needs the other company incentive system to finish this puzzle. As the rapid development of the company to promote the world’s most powerful organization, make its prosperity, requires not only legal means, but also can be used in economics, sociology, establish the board of directors of credit publicity system and incentive system, it is effective method.