Discussion On The Relevant Issues Concerning The Abstention System Of Director's Voting Rights

The abstention system of director's voting rights is an important part of the abstention system of voting rights under the corporation law as well as an important legal system to ensure the decision-making efficiency and fairness.As the famous American corporation experts Easterbrook and Fischel put forward,"If the limited liability is the most significant characteristic of Corporation Law,then the voting right is the second significant".Therefore,the voting rights play a key role in the decision-making progress and the corporation governance.The abstention system of director's voting rights has been established in various countries along with the reform of the Corporation Law and it has been continuously perfected.In China,the system is regulated in the form of a basic rule in Article 124 of the "Corporation Law".In addition,the rules of the board of directors and the relevant principles of listed companies confirm this system under the organizational form of the incorporated companies.On June 17,2016,Vanke's board disputes,catching academic attention and leading to heated discussions,reflected a series of problems caused by the vagueness of legislation and bylaws in the operation of this system.What's more,it also guided us to be problem-oriented and conduct in-depth multidimensional investigations.This article combines case studies and theoretical studies and reflects on the deficiencies of China's abstention system of director's voting rights at the legislative,theoretical,and practical levels respectively.This article uses the comparative thinking method,chooses the Corporation Law in America as the object of the study which is comparatively perfect and mature,analyzes its typical practice in voting rights abstention system components,and selects typical cases to explore the United States' empirical practices based on the principle of “Substantive Fairness Doctrine” which provides references on the perfection of this system in China.When it refers to the issues related to the independent director,the writer starts from a discussion on the balance between the "independence" and "relevance" of these directors and then analyzes the legality and compliance of their abstention.Finally,according to the current conditions in China,combined with advanced American experiences,this article proposes suggestions for the establishment and improvement of our country's director voting rights abstention system.The introduction part illustrates the legislation status and background of the voting right abstention system in our country.It points out that there are problems and deficiencies in the operation of this system due to the vagueness of legislation,and then puts forward the topic of this paper.The full text is divided into five chapters;the first chapter is the introduction of the basic theory,including the definition of the voting right abstention system from the broad sense and the narrow sense,the research on its origin and evolution history,the clarification of its background and legislative purpose,and the summary of its basic characteristics.This chapter also makes analysis on its legal value,jurisprudence and function,and then indicates the necessity of establishment,development and improvement of this system.This system has the function of avoiding the misuse of director's power,balancing the interests of all parties and maintaining the company's operating order.Overall concepts and various important issues are discussed in the second chapter.The contents include the discussion on the significant elements such as "Scope of Application","Interested Directors","Application Methods","Effectiveness Determination" and "Deficiency Relief" respectively,and the clarification on the problems that may cause problems.The "independent director" is a special issue listed independently;besides,the compliance and legality of their abstention are discussed.The third chapter is based on analyses of the first two chapters.The disputes and cases of the relevant issues in our country are listed and summarized,the loopholes and problems existed in our country's practices are pointed out.The fourth chapter is the introduction of American system and the analysis of precedent cases.Through the relevant provisions of the American corporation law and the treatment of disputes in its judicial practice,the fourth chapter aims to lay the foundation for further analysis of our country's system.Finally,combined with analyses of the above four chapters,the fifth chapter systematically examines the abstention system of directors' voting right,puts forward legislative proposals according to the current situations in our country,and presents ideas to improve the relevant systems in our country.