The Non-compete Obligations Of Directors And Executives

The non-compete obligation of director and executive originated from the trust system in the Anglo-American legal system,and developed independently in the era of separation of modern enterprise ownership and management rights.It appeared to prevent directors and executives from using the information he obtained from the company he worked for to damage the company Benefit.From the promulgation of the company law for the first time in 1993 to the publication of the draft company law in2021,my country’s non-compete obligation of director and executive has been revised and improved many times,from absolute prohibition to relative prohibition,adding supervisors as the subject of obligations,and refining the disclosure obligation of the subject of obligation.But even so,the non-compete obligation,as an imported product,still faces many problems in China’s rapidly developing business environment.Through judicial empirical analysis,it can be found that the number of related cases in our country is on the rise in general,and they are mainly distributed in the eastern coastal areas where commerce and trade are prosperous,with the characteristics of high appeal rate and high rate of verdict revision.To sort out and analyze the difficult problems of high repetition rate and the existence of opposite judgments,this paper demonstrates the following five aspects: first,define the subject of director and executive’s non-compete obligation,clarify the nature of their family members engaging in non-compete behavior,and The rules for substantive identification of the identity of executives;the second is to clarify the scope of non-compete,and the boundaries of non-compete obligations from the perspectives of business scope and region;the third is to clarify the identification of business behavior in "self-operating or operating for others" The fourth is to reveal the rule of replacing the "consent of shareholders’ meeting or general meeting of shareholders" with implied consent in current judicial practice,emphasizing the importance of perfecting shareholders’ disclosure obligations;fifth is to analyze the court’s determination and calculation of the scope of incorporation rights in practice.As a trustee,directors and executives personal interests and the company’s interests are naturally in conflict,but director and executive’s personal interests and freedom of choice should not be restricted by overemphasizing the company’s interests.By defining the company’s interests and the scope of non-compete obligations of director and executive,the company and their personal interests should be balanced to create a win-win situation.First of all,through three clarifications: "clear the scope of non-compete,clarify the identification of business behavior,and clarify the region and time limit of non-compete" to clarify the content of non-compete obligations.Secondly,it is necessary to improve director and executive’s responsibility for violating the noncompete obligations,promote the application of the overlapping model of the right to belong and the right to claim damages,and popularize the operation of compulsory compensation in the agreement of non-compete.Finally,the perfect research of director and executive ’s disclosure obligation,by referring to the legislation of Germany and Chinese Taiwan,distinguishes the disclosure procedures of limited liability companies and joint stock companies.At the same time,it is necessary to pass legislation to ensure the integrity and truthfulness of the content disclosed by the compete directors,so as to ensure that the board of directors or shareholders can make a judgment in line with the interests of the company based on the disclosed content.