The Study On Independent Directors’ Civil Liability

Independent director system was introduced into China for more than decades, but itsoversight of management and the purpose of protecting social interests of small investorsfrom controlling shareholders are far from up to our expectations, the focus of these problemsis that the legal liability system is not established, the reasons seem to interweaver andcomplexed. As a most effective approach of right relief, the civil liability system is theweakest link on the legal liability system construction.The article is divided into three parts: Introduction, Body and Conclusion. Introductionexplains the responsibility of independent directors in China is basically a duty on a publiclaw，while the civil liability bear a disproportionate share by a brief description of a series ofcases, the reason includes unclear lines of responsibility, and the imperfect responsibilitysystem. The Body is divided into four chapters. Chapter I analyzes the current situation of ourindependent directors’ liability, which highlights the problem of imperfection of China’sindependent directors’ civil liability system, followed by an awkward position andresponsibilities without protection state of independent directors. Chapter II analyzes theobligations and responsibilities of the independent directors, and the core obligations includesthe duty of loyalty, attention duties and obligations of information disclosure. As the result ofwhat responsibility should be bear if a breach of such obligation comes over, the degree ofresponsibility, the implementation of a wide and gentle legislative policy of responsibilityundertaken, the analysis of attention duties and obligations of information disclosure will bepaid most attention. Chapter III indicates that Independent directors of the limitation ofliability and exemption system should be established. Chapter IV sets out a duty to protectmechanism, and it will restrict or exclude the independent directors on Civil liability for abreach of duty of care. The incentives of independent directors need to be set up, while its roleis to encourage independent directors to perform their duties faithfully and efficiently.