A Case Study On The Dispute Between Xingwang Company And Jiangxiaofen

Directors are obliged to be diligent to the company.They should deal with the company affairs with reasonable,cautious,diligent and attentive people of good faith and common caution under similar circumstances.The duty of diligence is an important obligation in modern company law.It is also clearly stipulated in the company law of our country.The company law is supplemented by the system of shareholder representative litigation to strengthen the fulfillment of the duty of diligence of shareholders.However,the Company Law of our country only confirms this obligation.There is no clear stipulation on the specific content and standard of conduct of this obligation.It is more like a declaratory clause.There is no detailed stipulation on how diligent the duty of diligence should be and under what circumstances directors should be responsible.In recent years,many cases involving directors violation of diligent obligations to damage the interests of companies have been brought to court.Due to the lack of clear and specific laws,different courts have adopted different standards of review on this issue.In this case,the court has adopted a combination of company law and tort law to determine whether directors violate diligent obligations.It has carried out judicial review on whether directors violate diligent obligations and whether they cause losses to the company.At the same time,in the reasoning part of the determination of diligent obligations,it has invoked the rule of commercial judgment,which can be said to be a major innovative feature of this case.However,when quoting the commercial judgment rule,the court did not analyze the full elements of the commercial judgment rule,only two elements,which became the flaw of the case.The paper suggests that in the judicial review of diligent obligation in our country,we should introduce the rule of commercial judgment,and on the judicial application of the rule of commercial judgment,we should make operational judgment objectively and reasonably for the best interests of the company from the aspects of subject qualification,business judgment behavior,bona fide and rational trust,not violating the compulsory provisions of the law,distribution of burden of proof and legal effect,etc.Some suggestions are put forward.