The Manager's Conflicts Of Interest In Corporate Governance

The main object of this study is a conflict of interest(“COI”)in corporate governance,during the development of modern society,the company plays an increasingly important role for the social and economic development,and how to improve corporate governance,from COI view,mainly reflected in the form and specification method,this paper analyzes from western theory and jurisprudence,we analyze the formation of COI regulation methods,analysis of two system of the Western common law and Civil law in COI part,analyzes the performance of the COI by three areas:self-dealing of the directors,manager salary,company opportunity,concluded the legally COI differences in Regulation between the two legal system,as well as deficiencies in our corporate law,in order to better develop and study the mature COI regulations.In common law,the theoretical basis of the regulation is based on the theory of fiduciary duty,a trusted person liable for the company's managers as kind of a loyal duty,in the systems of the common law,developed loyal obligations under the fiduciary relationship,and thus to restrict managers' COI behavior.In civil law,the obligation is considered loyal relationship similar to trusteeship,getting commission by the custodian on behalf of trustees and the acquired property and interests areattributable to being custodians,trustees should put their own interests after being custodian and shall not use their personal gain.Faithful obligations embodied in legal regulation,which can be reflected on the restriction of the directors because of the COI,in national laws there are three main aspects of COI,one is the self-dealing of the directors,executives,another is the compensation of the executives,the third is the take the advantage of the potential business opportunities because of the position by the directives,there are both ways of the procedure and material review for the COI confirmation,from the procedure view,when there is any COI happened,the stakeholder should fully disclose the related matter in detail,and obtain approval of the company's management board,in material,a fair COI matter would require the company or Court review for the directors,executives and their associated persons during and after preparing the company self-dealing and the possible use of the company asset and opportunity,the related matter should be fair,justice,reasonable and in the interests of the company to ensure adequate protection before they approved the directors,executives and association people to get the reasonable personal interest in COI matters.In practice,there are some confuse about the company interest and shareholder,the main shareholder control the company operation and it is also necessary to confirm the true interest of the company,in order to get the compensation when there is,also our local corporate law regulate the COI provisions studying the civil law and gradually absorb the many theories from the civil law system,summarizes the provisions of faithful duty of the company executives,but not much of the procedural requirements,does not require stakeholders to disclose COI matters,and there are no strict rules defining the content and format of disclosures,the fair criteria entirely subject to the company management board,we can see there is no much research on the matter,and mostly rely on the trust for the company's management judgment,while no provisions of the Company Law in the process of self-dealing and COI the remuneration approved,stakeholders should withdraw of all the decision making process on the referred matter,so I recommend to borrow the foreign experience to enhance the procedure for approving the COI matters and should put the fair tradeprinciple on the madantory company law,and when there is any damage happened to the company,the court can use the fair trade principle to directly judge and also from the corporate governance view,the company should develop the articles of association and management board policy to do the internal control to better protect company interest.