Regulation On The Fiduciary Duty Of Controlling Shareholders Of Listed Companies

The shareholding structure of listed companies in China is characterized by one dominant share,and the proportion of absolute and relative holding modes is relatively high.The controlling shareholders of listed companies have gradually become the actual governance subjects of companies.In recent years,the phenomenon that the controlling shareholders of listed companies violate the obligation of good faith and exercise their control rights improperly emerges one after another.How to curb the abuse of the controlling shareholders’ control rights has become the core issue of the governance of listed companies.To some extent,the governance effect and level of listed companies depend on the business integrity and responsibility of controlling shareholders.Therefore,perfecting the legal regulation on the fiduciary duty of controlling shareholders of listed companies is helpful to limit and correct the abuse of control rights of controlling shareholders,balance the interests between controlling shareholders and non-controlling shareholders,and protect the interests of the company and the majority of small and medium-sized investors.This paper is divided into four parts:The first part first clarifies the meaning of controlling shareholders of listed companies,and uses formal standards and substantive standards to define controlling shareholders of listed companies.Clarify the meaning of the duty of care and the duty of loyalty contained in the duty of fiduciary duty of controlling shareholders of listed companies.Secondly,based on the theory of fiduciary relationship,principal-agent theory,and corporate contract theory,it analyzes the theoretical basis of listed companies controlling shareholders’ fiduciary duty.Finally,it elaborates on the necessity of perfecting the legal regulation of listed company’s controlling shareholder’s fiduciary duty.On the one hand,it can regulate the integrity performance of the controlling shareholders of listed companies,realize the self-discipline of controlling shareholders and curb their self-interested behavior,on the other hand,it can correct the alienation of capital majority decision and balance the interests of controlling shareholders and non-controlling shareholders.The second part investigates the legal regulations on the duty of good faith of controlling shareholders of foreign listed companies,and focuses on the introduction of three countries,namely the United States,the United Kingdom and Germany.In judicial practice,the United States strengthens the review of the fiduciary duty of the controlling shareholder through case law,forming a comprehensive judgment that the controlling shareholder violates the fiduciary duty.The United Kingdom established the unfair damage system through legislation to strengthen the litigation relief of minority shareholders against the behavior of controlling shareholders violating the duty of good faith.The enterprise group system in Germany provides a model for regulating the fiduciary duty of corporate controlling shareholders,which is in line with the trend of collectivization of listed companies.The third part concretely summarizes the problems existing in the legal regulation of the fiduciary duty of controlling shareholders of listed companies in China.First of all,the fiduciary duty of controlling shareholders of listed companies in China is mainly stipulated in the normative documents of China Securities Regulatory Commission,with a low level of effectiveness,while the Company Law,as a superior law,does not explicitly stipulate the fiduciary duty of controlling shareholders of listed companies.Secondly,in the face of the collectivization trend of listed companies,the legal person controlling shareholders are not endowed with certain unified management rights and distinguish between natural person controlling shareholders and legal person controlling shareholders.In addition,it is difficult for independent directors in China to effectively supervise the acts of controlling shareholders of listed companies that violate the obligation of good faith,and independent directors have limited rights to regulate controlling shareholders of listed companies.Finally,there is still room for improvement in the litigation relief system of minority shareholders against controlling shareholders for breach of the obligation of good faith.The fourth part puts forward some suggestions on the legal regulation of the fiduciary duty of the controlling shareholders of listed companies.First of all,it is suggested that the fiduciary duty of the controlling shareholders of listed companies be written into the company law to clarify the object of fiduciary duty of the controlling shareholders of listed companies,the content of fiduciary duty and the damage consequences of the breach of fiduciary duty.In addition,the corporate group system is used to regulate the fiduciary duty of the legal person controlling shareholders,stipulate the fiduciary duty and corresponding responsibilities of the legal person controlling shareholders,and regulate the fiduciary duty of the legal person controlling shareholders by strengthening the disclosure of information between the legal person controlling shareholders and the listed company and allowing the legal person controlling shareholders to establish group contracts with the listed company.Secondly,it should improve the legal regulation of typical controlling shareholders’ acts of violating the duty of good faith,including strengthening the examination of the fairness of related transactions of controlling shareholders,and refining the civil compensation system of controlling shareholders’ insider trading and market manipulation.Thirdly,the legal regulation rights of independent directors on controlling shareholders are improved by strengthening the role of independent directors’ veto power,strengthening the protection of independent directors’ right to know and granting independent directors’ right to disclosure.Finally,by broadening the application of the right of share repurchase and lowering the threshold of shareholder filing a representative lawsuit,it improves the litigation relief measures of small and medium shareholders against controlling shareholders for violating the obligation of good faith.