Research On The Duty Of Diligence Of Independent Directors Of Listed Companies

In 2020,the new Securities Law significantly increased the administrative penalty imposed by CSRC on independent directors,which significantly increased the risk of independent directors’ diligent performance of duties.In the securities capital market in2021,there has been the first case of independent directors who did not perform their duties diligently and received high penalties.Independent directors are directors with double special obligations,and the content of their duty of diligence should be different.However,the content of the duty of care in the Company Law of China is only expressed in principle,and the extension and boundary of the independent director’s diligence and responsibility cannot be seen.The judicial application is also facing challenges all the time.As the revision of the new Securities Law comes to an end and the Company Law is about to be revised for the sixth time,it is an unavoidable task for the reform of the Company Law to improve the duty of diligence of independent directors so as to further fill the institutional vacuum and escort the healthy development of the governance of listed companies in China.There are four chapters in the main body of this article.The first chapter is an overview of the independent director’s diligence obligation system.Starting from the introduction of the particularity of independent directors,it first elaborates on the evolution of the independent director system,and highlights the particularity of independent directors by comparing the differences between independent directors and general directors and the board of supervisors.Secondly,it discusses the particularity of the duty of diligence,mainly discussing the role and responsibilities of independent directors,professional background and the core feature of the duty of diligence-the criterion of diligence.Finally,it sorts out the relevant laws and regulations scattered at different levels,and points out the lack of current legislative refinement and the changes in the risk of independent directors’ diligent performance of duties under the new law.Based on this,the second chapter is an analysis of the issue of independent directors’ duty of diligence in listed companies.The main content of this chapter is based on case studies,exploring the accountability logic for independent directors’ failure to perform due diligence in practice,and pointing out the three major obstacles to the operation of the current system.In Chapter 3,the theoretical discussion of independent directors’ duty of diligence in listed companies,it explains that the source of independent director’s duty of diligence needs to be traced back to the theory of fiduciary duty,and discusses the differentiation of the duty of diligence between different subjects in the field of commercial law.The institutional value of the existing business judgment rules.At the same time,it analyzes the legal nature and civil liability of the breach of the duty of diligence.Based on theoretical discussion,it provides basis and guidance for the improvement of the content of the duty of diligence.Chapter 4 is about the improvement of the system of independent directors’ diligence obligations in listed companies.This chapter mainly covers the complete connotation of independent directors’ diligence obligations,the setting of standards for reasonable and prudent independent directors,and the content of regulations for ensuring diligent performance.The duty of diligence should evolve based on the actual situation,and the staged and procedural duty of diligence of independent directors should be reasonably defined.Based on the legislative setting of independent directors’ diligence responsibilities and actual performance of their duties,it is advocated to distinguish between reasonable and prudent independent director standards on a limited and effective scale,to nest special standards in general standards,and to be independent in practice.The "signature responsibility" of directors is regarded as a "factual requirement" for performing duties.Finally,it puts forward the guarantee regulations for independent directors to perform their duties diligently.Guided by the post-review of business judgment rules,it sets up a risk aversion path for independent directors to perform their duties diligently.In a nutshell,through one-to-one correspondence with the problems mentioned in the previous article,we put forward suggestions for improving the system of independent directors’ diligence obligations under the governance structure of listed companies.