Liability Of Directors To Third Party

In the early twentieth century, as board of directors went on the track of real independence, corporate governance showed an obvious trend of steering from Shareholder Centralization to Director Centralization. Under the influence of this change, circumstances that directors infringe legitimate interests of third parties such as shareholders and creditors through authority abusement happen frequently. To aggravate liability of directors or not is attracting more and more attention, which has got supports of many scholars around the world. Liability of directors to third party is a significant component of director liability system in many countries. Currently, our discussion is mainly focused on liabilities of directors to corporate and shareholders, however, focus on liability of directors to third party is much less. Considering the actual situation of our country, in order to weaken the imbalance between director and third party, to perfect liability of directors to third party system is imperative.The paper aims on studying liability of directors to third party, expounding the scope definition of the core concepts-Director and Third Party, the nature of the liability in the foreword part. In section one, necessity of establishing liability of directors to third party system is discussed from three aspects:to perfect corporate goverance structure, to remedy defects of limited liability system, the need for third party to protect their interests. In section two, several supporting mechanisms are introduced, which will to some extent avoid excessive expansion of director liability. Relevant legislation of several countries or region are presented in section three, following by analysis and comparation towards legal provisions of China and Japanese. In section four, combined with the problems of our related legislation, the paper puts forward several legislative suggestions, such as to stipulate explicitly the liability of director to third party in our corporation law, to perfect the liability formation requisites and director liability insurance. Hope that my premature paper could provide some valuable references.