Research On The Criteria Of Director's Duty Of Diligence

Companies nowadays often see their operation mode marked by the separation of ownership and control.Therefore,the role played by their members of the board of directors seems to be vital: does he or she assume the responsibilities given by the company in a loyal way? Does he or she prudently and rationally comply with the duty of diligence? All of these will have a significant influence on the company's interest.To restrict the power of the chairman and to incite him or her to respect the obligations,China reformed its “Company law” in 2005 and clarified the notion of duty of diligence.However,its core content: the rules to determine the duty of diligence isn't clear as expected and as a result,the application of this duty encountered some difficulties,which is unfavorable to balancing the conflicts of interest between shareholders and the members of the board of directors.How to define the criteria of the directors' duty of diligence has become a hot button issue in various countries,those countries in the two law legal systems has already got some achievement and formed a stable operation system.Based on the former research,this thesis has deeply analysis the existing problems of the criteria of the duty of diligence from practice and theory.Through the research methods of normative analysis,empirical analysis,comparative analysis,and other research methods,the author came up with the proposal of perfecting the rules of the diligent duty.This thesis is divided into four parts in order to study the judgement standards of the director's duty of diligence.The first part is to propose the question of the criteria of directors' diligence obligations within two aspects.On the one hand,by analyzing empirically the sample of 100 cases,and then summed up the practical dilemma in the existence of the standards of diligent duties;On the other hand,it has summarized the current standards for directors' diligence in performing duties from the prospective of the existing controversy.The second part has introduced the status quo of China's Directors' Duty judgingcriteria.Firstly,it sorted out the current situation of China's legislation on directors' diligence obligations,secondly it interpreted the corresponding laws about the existing problems and judging criteria from those principles and types.The third part is a comparison of the judging criteria of the other countries.It has compared the two main legal systems,civil law system and common law system including the United States,the United Kingdom,Australia,and Japan and Germany as well.By analyzing this it is in order to provide useful reference for the perfection of the standards of the directors' diligence in China.The fourth part is the proposal of how to improve the judging criteria of the directors' duty of diligence.This section firstly determined the principle that it should be applied to the principles of strictness and appropriateness,abstraction and specific combination,and statutory and contractual standards.Secondly,it proposed a specific application that combinations of abstract subjective and objective standards which means that we use objective criteria as a statutory general standard and the subjective standards as supplementary and then connected with the specific behaviors.Finally,it put forward that whether the operating decision has been fulfilled the directors' duty of diligence should be introduced to the business judgment rule.