A Study On The Scope Of Directors’ Liability For Breach Of Fiduciary Duty

As far as the world is concerned,one of the most prominent characteristics of modern company law is that it centers on the rights and obligations of directors,while the rights and obligations of directors are mainly reflected in the fiduciary obligations of directors.There are many defects in the current company law of our country,but in fact,it is very important and complicated to determine the scope of compensation for breach of fiduciary duty,which is also an urgent problem to be solved in judicial practice.This paper consists of four parts,the main contents are as follows:The first part is the theoretical basis of the scope of compensation liability for breach of fiduciary duty.First of all,from the classification of directors’ fiduciary obligations,directors’ fiduciary obligations are mainly divided into two categories:Loyalty Obligations and diligence obligations.Its theoretical basis mainly includes the theory of commercial effect,the theory of company contract and the theory of stakeholders.Secondly,it is necessary to clarify the legal basis of directors’ liability for compensation for breach of fiduciary duty.The definition of the scope of directors’ liability for compensation for breach of fiduciary duty depends on the degree of loss caused to the company by their acts.The shallow level of the definition of the scope of directors’ liability for compensation is the issue of tort in company law,but the deep and secondary definition of the degree of loss often involves the understanding of the theory of company interests and the principle of business judgment.The second part is the analysis of the current situation of the scope of compensation liability for directors’ breach of fiduciary duty,which includes the legislative status and judicial status The topic of this paper is only involved in Article 149 of the company law and Article 19 of the tort liability law,but there are differences in the level of legal application and the understanding of the articles themselves,and because there is no further provisions on the scope of liability for compensation,it is difficult to provide useful help for the judicial practice on disputes.Secondly,the author mainly analyzes the cases of directors’ liability for compensation for breach of fiduciary duty in China’s judicial practice from 2009 to 2019.Injudicial practice,such disputes mainly involve limited liability companies.The definition of compensation liability in court judgment mainly includes several ways,such as confirming the actual loss,mediation agreement between both parties,etc.This kind of judgment is mainly because the judge’s judgment thinking is subject to the influence of the rectification principle and the comprehensive compensation principle in the tort liability law,For Japan,there are two ways to determine directors’liability:vested interests and actual losses.Both the United States and Japan have their own ways to limit and exempt directors’ liability.The fourth part is the suggestions on the construction of the rules for the scope of compensation liability of directors’ breach of fiduciary duty.Generally speaking,there are two principles to define the scope of directors’ liability for breach of fiduciary duty:the principle of full restitution and the principle of offsetting profit and loss.On the basis of determining the general rules,the duty of diligence and the duty of loyalty of directors are distinguished,and the more detailed rules for determining the scope of responsibility are determined.Director’s duty of diligence is the requirement of director’s personal ability.Therefore,if the director’s performance of duty of diligence is not sufficient through the evidence after the event.The best rule for directors’ duty of loyalty is to shrink the principle of full recovery of corporate losses.Finally,the limitation and exemption rules of directors’ liability are the necessary components and major amendments to determine the scope of directors’compensation.The limitation and exemption of directors’ liability can be mainly regulated by the autonomy of the articles of association,exempted by the company’s subsequent resolution and exempted by providing compensation to directors.