Research On Directors’ Duty Of Care Standard Of The Listed Companies

Directors’ duty of care standard is the one to determine whether the director is diligent or not, which is the core system of duty of care and be divided into two parts: contents and conduct standard. This article summarizes four contents of duty of care from the laws, department regulations, and other normative documents and so on. After comparing the three main conduct standards, the article proposes that we should adopt the objective standard of an ordinary prudent person. Besides the preface and conclusion, this article is divided into three chapters.In chapter one, the article summarizes and classifies the duty of care in the beginning, then proposes that the theoretical foundation of directors’undertaking the duty of care is to balance the interests of shareholders, companies, creditors and other stakeholders, and realize the principle of incentive and constraint. Through study of the legislation and legal application about duty of care in China, the article points out the practical significance of researching the standard of directors’duty of care of the listed companies.In chapter two, on the basis of combing and summarizing of the content in laws, administrative rules, other regulatory documents and rules of the Exchange, the content of directors’duty of care of listed companies is typed into four, that is to attend meetings of the Board and committees, be fully aware, concern and inspect, Urge to establish and maintain an effective internal control system.In chapter three, the first section studies the three main standards all over the world which is subjective standard, objective standard, and the combination of subjective and objective standard. Considering the status of corporate governance, the article suggests using objective standard of an ordinary prudent person in China. For further clarifying the meaning of the standard, the element will be deeply analyzed.