On The Boundary Of Judicial Intervention In Corporate Governance

Company autonomy is the main way for the corporate governance and a tendency to highlight the value of modern company law. However, Since the1980s, the world has repeatedly exposed violations scandal of some large companies, mostly because of poor management, corporate governance structure is not reasonable, and ultimately to the collapse, not only to their own, back to other countries and even the world economy caused incalculable loss. Therefore, the international set off a wave of corporate governance. With the accelerated process of global economic integration and increased competition in the international context, since the1990s, many countries have began to relax government control and expand company autonomous space, in order to improve the enterprise’s competition ability.Due to interest stakeholders and relationship of companies are extremely diverse and complex, conflict of interest is unavoidable. However, once you break through a line of conflict of interest, internal governance mechanism becomes powerless, to a "failure", it is necessary to seek outside intervention. Internal governance mechanism doesn’t work at this time and external regulation forces withdraw, unable to return to normal operation order, which brings to the company itself and the various stakeholders in a huge loss. Therefore, corporate legislation around the world relaxes government control of the company and expands the area of judicial interference in corporate governance at the same time, to further play the role of promoting and safeguarding of judicial mechanism for corporate governance.However, we can’t ignore the limitations of judicial intervention in corporate governance, including:(1) the inherent features of judicial inhibit the effect of the intervention;(2) likely to prejudice corporate autonomy;(3) will waste judicial resources and intensify the contradiction between the parties;(4) make operators easily produce dependence and cause the rigidity of corporate governance;(5) can easily lead to the shareholder opportunism. It can be said that jurisdiction if free to intervene, not only not conducive to the smooth progress of corporate governance, but also has many negative issues. Therefore, an accurate understanding and grasp of the boundaries of judicial intervention in corporate governance, is an important prerequisite for effective judicial corporate governance functions.The inherent jurisdiction modesty requires the judiciary in dealing with corporate governance disputes should maintain sufficient caution, self-control and humility. Companies as independent subjects of private law, with full autonomy and corporate governance disputes often involve a purely commercial transaction, therefore, judicial interference in corporate governance must respect the company’s own decisions and actions. Corporate governance dispute occurs, first start internal governance mechanism to resolve. If internal corporate governance mechanism is illegal, and refuses to intervene or can not solve, it will consider the involvement of external forces. Adjustment mechanisms such as the market, with certain corporate governance functions, only when justice mechanism has significant advantages compared with them, that there is a need to intervene.At present, countries for judicial intervention in corporate governance research focus on specific corporate governance systems, just simple discussions on the boundary of judicial interference in corporate governance exist in a few papers or books and has yet to form a more comprehensive and deeper understanding on this issue. Theory is not mature, which lead to the judge in the judicial practice are also difficult to grasp the boundary, and the phenomenon of different trials of similar cases is not in the minority. Our "Company Law" revised in2005, has greatly expanded the space of judicial intervention in company operations, but there are still many defects and shortcomings, and obstacles in the judicial practice, our development of judicial involvement in corporate governance is not ideal.Study of the boundary of judicial intervention in corporate governance, is to provide some useful inspiration for improving our present situation of judicial intervention in corporate governance. Aiming at problems in theory and practice, from two aspects of the entity system and the judicial power operation, to perfect our judicial intervention mechanism of corporate governance. This requires our legislation and judiciary act at the same time, on the one hand, to improve corporate governance legislation as soon as possible; on the other hand, to perfect the trials of corporate governance cases, in order to promote the smooth development of companies.