The Comparative Study Of Duty Of Care Of Directors In China And The United States

With the development of market economy,the company,as the main body of market economic activities,its importance is self-evident.As the managers of the daily affairs of the company,the directors of the company play an important role in the operation of the company.At the same time,with the continuous strengthening of director centrism,improving the supervision of directors’ behavior has become the general trend.As the basic obligations of directors,the duty of loyalty and the duty of care have always been one of the most controversial and discussed areas in the company law.Article 147 of Corporation Law of China clearly stipulates that the directors,supervisors and senior executives have the duty of loyalty and diligence to the company,while the common law system is called the duty of loyalty and duty of care.Compared with the duty of loyalty,the meaning and content of the duty of care is vaguer,and it is more difficult to determine the standard of examination.Therefore,the research on the duty of care of directors has been controversial.The Corporation Law of our country does not stipulate clearly the duty of care of directors,which leads to disputes in the academic field and vague in judicial standards.It is an urgent problem to clarify the connotation and examination standard of duty of care in China’s company law.Based on the legal provisions and judicial cases of directors’ duty of care in China and the United States,this paper discusses the connotation and review standard of the duty of care.It is found that the duty of diligence in China is basically the same as the duty of care in the United States.Both of them are the inspection of directors’ conscientiousness,diligence degree and ability in performing their duties.There are some problems in the judicial review of the duty of diligence in China,such as formalism,unclear standard and unclear concept.The concept of duty of care comes from the common law system.The United States is a case law country,and the theoretical development of duty of care mainly comes from the continuous interpretation and discrimination of judges in cases.After a hundred years of development,the duty of care of directors in the United States has formed a relatively complete standard and system in theory and practice,and the judges’ discussion on how to apply it to specific cases,following the precedent,is still advancing with the times.In the face of the new economic situation,the theory and practice of directors’ duty of care in China need to be developed.Learning from the advanced experience of the United States and other countries,and combining with the development of our country,it is necessary to implement the application of the rules of directors’ duty of care.The existing laws and regulations of China on listed companies and other large companies regulate more,such as Listed Company Governance Standards,Guidelines for the Articles of Association of Listed Companies,but the behavior of directors of small companies such as limited liability companies mainly depends on the company law and the articles of association.In fact,in recent years,most of the cases involving the duty of diligence of directors,supervisors and senior executives in China involve small limited liability companies.However,due to the small number of shareholders and their direct participation in the operation and management of the company,there are differences between them when examining the behavior of directors,supervisors and senior executives.The governance system of listed companies and large-scale companies is more perfect,and the separation of ownership and management is more common,while that of small non-public companies such as limited liability companies are on the contrary.In different corporate governance models,the perspective of directors’ duty of care is different,mainly reflected in the nature of behavior and review standards,but the requirements for directors’ behavior are consistent.Strengthening the supervision of directors’ behavior is conducive to the development of the standardization of corporate governance system,and is a good strategy for the company to adapt to the new situation of competition.