Takeover And The Directors' Obligations

Listed corporation takeover is always the most important thing in the security markets,for the takeover can expand the company's operating scale,increase its activities in the market's share in short time,and in Comparison with the internal growth,takeover can significantly reduce costs,so the takeover is the corporation's favourite thing.While on the other hand,where there is takeover,there is anti-takeover.The target corporation will take all kinds of messures to confront the takeover, especially the hostile takeover.So a fierce war on the control of the target corporation broke out between the two parties of the takeover.When talk about the target corporation's anti-takeover,the corporation's first problem is who has the decision-making power of anti-takeover measures.The target corporation can take many measures such as "Shark repellent","Scorched-earth policy","Poison pill","Golden parachutes" and so on,but the premise question is who has the power? Is the target corporation's General Meeting of Shareholders,or the Board of the Directors?Another problem is:the target corporation's anti-takeover necessarily involved the interests of many people,such as the shareholders's interests, the management's interests,the interests of the creditors of the corporation. During the anti-takeover,these interests influence each other,resulting complex contradictions.The management of the target corporation is in the core position during the anti-takeover.So,how to use the director's obiligation system to protect the interests of the weak,balance the interests conflicts is also an issue which can not be ignored.Therefore this paper mainly about the two important questioins, consists of there parts-the perface,the text,the ednding.The text includs three chapters:Chapter One is the summary of the anti-takeover system and the director's obligation,which includs the basic concepts and theories.First of all,this chapter defines the concept of the anti-takeover,and introduces several typical anti-takeover measuers.Second of all,there is an exposes on the rationality of the target corporation's anti-takeover measures,which mainly for protect the equal Status of the the two sides,protect the shareholder's interest,the director's faithfully obligations' need etc.Third of all,this part discusses the necessary of regulation on the target corporation's anti-takeover measures,the target corporation has the power to take anti-takeover measures,but this power should have reasonable restrictions,otherwise the board will abuse it and bring detriment to other parties' interests,that's why there is regulation.Lastly,there is an explanation about why we should define the director's obligation in the activity of anti-takeover.Chapter Two is target corporation's decision-making power of anti-takeover measures and director's obligations,this chapter discusses the first problem in the target corporation's anti-takeover.Because of our country does not clearly defined who has the power,so after introducing the England and American's provisions,I proposed that we should establish the board mode,and through the director's obligation to amend this mode's defects,so the director's obligation is an safeguard mechanism.Chapter Three is the balance of the interests conflicts and the director's obligation,that's also the second major problem.This chapter mainly listed several interests conflicts,such as the conflict between the target corporation management and the shareholders,the conflict between major shareholders and small shareholders etc,then introducs the existing settlement mechanism and point out its defects,Finally,this chapter focuses on how to use director's obligation system to balance the interests conflicts,and perfect the existing settlement mechanism.