Study On Director's Business Judgment Rule

Director is the trustee or fiduciary of company's property management and operation,they must be diligent to the company,this is the duty of care which is stipulated in company act and company articles.As a legal binding mechanism,director's duty of care has the value of maintaining safety of property and improving efficiency of capital,but also exposed the defect of ignoring director's legal rights and impeding the pursuit of maximizing the interests of the company.Business judgment rule find the balance of interests between director and company,making up the defects of the traditional director's duty of care,and to some extent,coordinating the conflict between two value, presumption and burden of proof,and the implementation of separation between standard of conduct and standard of judicial review,realizing the correction of traditional duty of care.In our country's 2005 revision of company law, there are clear stipulates on the director's duty of care, using the expression of “the duty of diligence”, but for the director's duty of care of the contents and standards of behavior are not clearly defined, and not a word about business judgment rule which have increasingly mature in the United States, Britain, Germany and Japan. Director of company act in our country relative to other countries in terms of a duty of care is a traditional directors' duty of care. Through empirical analysis,we can find that cases about director violating duty of care often appears in our judicial practice,it is certain that this rule would play a significant role in director's duty of care if we can overcome the obstacles and introduce business judgment rule to our country.