The Directors' Duty Of Diligence

With the conversion of the company’s management by the shareholders’board of directors’, directors in the company have been given more rights and autonomy, in order to balance enjoyed by the directors of the rights,the obligations of directors emerged. Directors diligence obligations as one of the many obligations, which emphasizes the directors to perform their duties seriously, pruden,sensible, according to the relevant information and engaged in the general knowledge and special knowledge of the industry,and consider the possible risks according to their own knowledge and experience to make judgment. Company law in1993established the duty of loyalty of directors, but avoids the obligation of diligence provisions. The revised company law in2005to increase this provision:The directors, supervisors, senior management should abide by laws, administrative regulations and articles of incorporation, the company bears the duty of loyalty and diligence obligations. Duty of loyalty and diligence obligations of the directors together to defend the interests of the company and shareholders. Companies Act for the contents of the directors diligence obligations.functions and standards of judgment, the prosecution of legal liability and legal responsibility for the exemption is no clear provisions, that is the law-makers simply let people know the existence of this term, but I do not know how to apply them, operability is poor in the judicial practice,no specific provision in the statute,the guidance of jurisprudence but also has its limitations,the more there is the reality of the impact on directors diligence obligations.Through study and learn the theory and practice of common law countries,and contact the country’s actual, analysis of the application of the directors’obligation of diligence in China. To the appointment of civil law relationship, the common law of agency and fiduciary relationship that provides a theoretical basis for the establishment basis of the research directors diligence obligations. Judge hearing a case of an obligation of diligence, must first determine its criteria in order to determine the merits;second,must be clear to the parties the burden of proof,these contents of statute law have disappeared without trace. By determining the content and functions of the directors’diligence obligations to clear the directors of breach of obligation of diligence responsibility, that the fault is attributable to the principle of violation of the obligation of diligence, and to distinguish between the degree of fault to assume responsibility size; the responsibility of directors in violation of the obligation of diligence, not only the company, it also includes the shareholders,including the third; directors of civil liability monetary compensation, complemented by the "ban","Declare ";damage there is relief,by using the Limitation of Liability and security measures, responsibility is limited within a certain range of the directors, avoiding the limited responsibility of the directors’personal ability to pursue meaningless, improve the company’s credibility and to safeguard the interests of the company and investors.