Legal Consideration On The Function Of The Board Of Directors Of Target Companies In Anti-takeover

At present,the research in the field of anti-takeover mainly focuses on the division of powers between board of directors and shareholders' meeting,directors' fiduciary obligations and legislative attitude towards hostile takeover,while ignoring the important function of the board of directors of target companies in formulating anti-takeover measures.The shortcomings in practice are as follows: the board of directors of the target company resists hostile takeover by formulating various anti-takeover measures directly,which does not conform to the logic of behavior as it ought to be;the board of directors of the target company formulates various anti-takeover measures which also have the defects of generality and individuality.This paper is divided into four chapters,as follows:The first chapter discusses the important function of the board of directors of the target company.It is divided into three sections.The first section is the research on the ownership of anti-takeover decision-making power.By comparing the two models of board centralism in the United States and board neutralism in the United Kingdom,and by comparing the current legal provisions and the rationality of the legal provisions in China,it is concluded that China is biased towards the British board neutralism model.Most effective anti-takeover measures belong to the shareholders' meeting and the board of directors does not enjoy them.Have the final decision-making power of effective anti-takeover measures.Section II discusses that the formulation of the plan is the basic function of the board of directors,mainly from the existing legal provisions and legal theory to find the basis.The third section discusses the importance of the function of formulating the plan,that is,the significance of the function of formulating the plan,which can support the effective decision of the shareholders' meeting,protect the interests of minority shareholders,standardize the behavior of directors and protect the interests of multiple subjects.The second chapter is about the principles that the board of directors of the target company should follow when formulating the plan.Limited by the limitations of statute law,the provisions of principles can play the functions of interpretation,supplement and amendment,and provide guidance for legislators,judges and parties.The principle that the board of directors of the target company should follow in formulating the plan reflects the main value or goal of the system and is the basic criterion that the board of directors should follow.The first section discusses the principle that the board of directors of the target company should protect the weak in general,focusing on protecting the interests of minority shareholders.Section 2 discusses that the board of directors of the target company should follow the principles of operational judgment,including the inversion of burden of proof and the need for reasonable and appropriate anti-takeover measures.Section 3 discusses that the board of directors of the target company should follow the principle of legal procedure in form,including clarifying that resolutions of the board of directors should follow legal procedures and the limits of the powers of the board of directors and the shareholders' meeting.The third chapter is the preparation of the target company's board of directors before formulating the plan,that is,due diligence is needed.Acquisition involves the transfer of corporate control rights.The corresponding plan formulated by the board of directors of the target company on whether or not to anti-takeover and how to anti-takeover is also related to the success or failure of the transfer of corporate control rights.It is of great significance to the change of corporate capital and ownership structure.Therefore,the plan formulated by the board of directors is by no means hasty and unfounded.Before formulating the plan,the board of directors must undergo due diligence.The first section discusses the necessity of due diligence by the board of directors of the target company.Section 2 discusses the main contents of the due diligence investigation of the board of directors of the target company,including the basic risk information of the buyer,illegal information of the buyer and relevant industry information.Chapter IV is to improve the specific plan formulated by the board of directors of the target company,which is the key chapter of the full text.When the board of directors of the target company receives the acquisition signal,based on the principle that the board of directors should follow and the preparation of due diligence,the board of directors needs to formulate anti-acquisition plans,specific anti-acquisition measures and best price plans for shareholders and companies when it is unavoidable to be acquired.This chapter is divided into three sections to discuss how to improve these three types of programs.Section I formulates whether to accept anti-takeover plans,focusing on the reasons for opposing hostile takeover plans.Of course,it can be directly included in the reasons for specific anti-takeover measures,not separately formulated.Section II formulates specific anti-takeover measures.Mainly for the practice of share repurchase,profit distribution,amendment of the company's articles of association and other anti-takeover measures to propose common and individual amendments.The author suggests that the board of directors should clarify the management's analysis of the company's operation and other aspects when formulating the share repurchase scheme,specify the basis for determining the distribution scheme when formulating the profit distribution scheme,and specify that the revised articles of association are not contrary to the mandatory norms of law and are reasonable and appropriate when formulating the revised articles of association scheme.The common suggestion is that the protection of minority shareholders rights should be clearly reflected and the board of directors should be fully discussed.Section III formulates the best price scheme for shareholders and companies.The main reason is that when a company cannot avoid being acquired,the board of directors should change its role and formulate a plan not for anti-takeover,but for the best price of shareholders and companies.At the same time,the best price is not equal to the highest price,because the interests of stakeholders need to be taken into account.