On Director Duty

An important characteristic of the modern company law is the separation of enterprise ownership and enterprise operation, as a result, the focus on the shareholder conference shifts to the focus on the board of directors. With this historic reality, the common directors cannot directly participate in the real operation and management of the company, while the limits of operation rights of the board of directors expand increasingly. Rights and duty are closely associated. As rights expand, if the corresponding duty is not strengthened, rights may be abused. So, the company operators should be encouraged to develop their talents fully to bring more profits for the company and more rewards for shareholders' investment, at the meantime, it is natural to moderately strengthen the legal duty for the company and shareholders by operators, especially directors, to avoid and reduce the conduct of rights abuse by operators. The company laws in all the countries have regulations on director duty, so our country is no exception. However, it should be admitted that the regulations on director duty and responsibility are need to be improved in the Company law in our country. This thesis first analyzes the foundation of the establishment of director duty, that is, the relationship between company and directors, then it introduces the content of director duty system of the continental law system countries and Anglo-American law system countries, evaluates and analyzes the director duty in company legislation and puts forward some legislative suggestions on the perfection of the director duty system in our country. There are three parts in this thesis.The first part elaborates the foundation of the establishment of director duty. How to legally establish director duty depends on the relationship between directors and the company. Based on different relationships, the director duty are different too. First, it introduces some theories on the legal relationship between directors and the companies in Anglo-American law system, that is, fiduciary relationship theory and agency relationship theory, and it evaluates and analyzes them one by one. Second, it introduces the theory on the legal relationship between directors and the companies in continental law system, that is, deputy relationship theory, and it evaluates and analyzes it. Besides, it compares the agency relationship theory in the Anglo-American law system with the traditional deputy relationship theory in continental law system and it concludes that the understandings of the relationship between directors and the company of both theories are not contradictory in nature and they are closely related. At last, through comparison and analysis, it concludes that deputy relationship and fiduciary relationship are uniform in nature. We cannot trace the relationship between the company and directors in modern company law strictly back to some legal relationships in traditional private law, like fiduciary, agency and deputy etc. The foundation of the establishment of director duty, that is, the legal relationship between the company and directors, is determined by economic foundation of our country, making up director rights responsibility relationship and rights duty relationship in company law.The second part is about the contents of the director duty system. First, it sums up the general contents of the director duty system. Directors should assume two duty to company, duty of care and duty of loyalty. The origin of duty of care is the deputy relationship among directors. It is a management duty in nature. It means: the director should carry out his duties with caution, diligence and skills as a rational cautious person in the same conditions, or he should bear legal responsibilities according to laws and statues. It should be subjective and objective to judge it. Subjectively, the director should try his best to handle company affairs according to honesty and fiduciary principle; objectively, the director should pay the same attention as those who possess the same kno...