The Directors’ Duty Of Diligence Judgment Standard Research In China

In the modern corporate governance, sound system has become a key obligation ofdirectors of modern corporate governance. Research firm legislative countries we find thatcommon law countries, the study of the system more in-depth due diligence obligations ofdirectors and achieved fruitful results, not only to make a full provision in the legislation, butin practice, also formed an effective operation mechanisms. Diligence obligation is to ask thedirectors in good faith to fulfill the duties of the company, to make the ordinary reasonablediligence obligations under caution in a similar situation and status, to work hard to achievethe best interests of the company. By examining the two legal systems of national legislationand practice due diligence obligations of directors in question, we can see that the directorsdiligence obligations are defined within a certain range, and together with the correspondingcriteria, not only to ensure that the directors dutifully for manage the daily affairs of thecompany, but also to stimulate the enthusiasm of the directors work. Although China in2005revised "Company Law" was first introduced due diligence obligations of directors, in2014our country has revised the "Company Law", one hundred and forty seventh provides thedirectors of the company bear the due diligence obligations, but the provisions are tooPrinciples and abstract, for what is diligence, what is its main content and other issues did notmake explicit provisions, judicial interpretation has no relevant explanation. In addition, theterms of the directors to determine whether a violation of due diligence obligations, ourcountry did not establish appropriate criteria. Therefore, our courts are unable to follow thetrial of such cases is not conducive to protecting the legitimate rights and interests of thecompany and its shareholders.This paper describes the rationale and criteria diligence obligations of directors, the usecase analysis to determine the standard of due diligence obligations of directors in judicialpractice in the use of the case to make a detailed analysis of the full study of the common lawand civil law countries Directors obligation of diligence criteria of legislation and practice,summed Two Legal lessons on this issue for our diligence obligations of directors to establish the criteria proposed general and specificity criteria.The first chapter discusses the criteria of due diligence obligations of directors’ generalquestions to clarify the meaning of due diligence obligations of directors to study thetheoretical basis and criteria diligence obligations. This chapter begins with the duty of duediligence obligations to distinguish the two concepts; secondly discusses the legal relationshipbetween the directors and the company, which is based on the premise of Directors undertakedue diligence obligations, each country have a different point of view, I agree more with thequasi-appointed relationship said the director explained the legal relationship between thecompanies; finally elaborated countries diligence obligations on directors criterion academicdebate issues, discusses the concept of the three criteria, the main representative of the Stateand its advantages and disadvantages.The second chapter of the director of judicial practice of applying the criteria of duediligence obligations. Because of the criteria for judging the issue no relevant legislation andjudicial interpretation, and therefore the second chapter analyzes the status quo of China’sjudicial criteria of due diligence obligations of directors, a milestone for China on the issue ofthe two cases, namely, Jiaxing, Zhejiang Genesis Real Estate Development Co., Ltd. v LvShilin, businessman Lung damage the company’s interests wonderful programs and BeijingDing mineral LLC v Wangdong Chun harm the company’s interests were the case Comment.Through the typical case of a simple discussion, the focus is on our diligence obligations ofdirectors criterion applied in judicial practice situation assessment, provide a reference valuefor the fourth chapter of directors’ diligence obligations established criteria.The third chapter discusses two legal representative national legislative provisions ondue diligence obligations of directors to determine the criterion. Britain is the first country toestablish a subjective standard of the country in question on the criteria changed fromsubjective to objective and then combining the evolution of subjective and objective; theUnited States at the beginning of the establishment of the system of due diligence obligationsof directors on an objective standard based, and in practice the use of the business judgmentrule; civil law countries to absorb and learn from foreign experience and lessons combinedwith national conditions, the directors diligence obligations stipulated criteria more stringent standard used in Japan a good administrator, the German regulations for expert standards.Through two legal due diligence obligations of directors to determine the national standardinspection and analysis, summed up the issue of the common criteria in all countries, toprovide reference for our diligence obligations of directors of established criteria.The fourth chapter is the key part of this article, mainly on what the country shouldestablish criteria diligence obligations of directors. First, the combination of China’s foreignexperience and practice, research and analysis of several factors that should be considered inestablishing criteria that corporate governance model and ownership structure, company sizeand type of the nature and scope of directors; again, the directors determined that duediligence obligations standards of refinement, subdivided into subjective psychologicalcriteria, standards, and standards of behavior on the decision-making process at the time, fromthree aspects investigated whether the directors in carrying out their duties diligently fulfilledobligations; Finally, the chapter on the chairman, executive director and three independentdirectors of special types of directors criteria for special discussion on the issue, in addition tothe general director do to goodwill needed, caution, honesty and other standards, but alsorequires diligence in fulfilling their obligation to do to comply with the special statusstandards.