Research On Diligence Obligation Of Directors Of The Company

In accordance with the regulation of our country’s company law, the article one hundred and forty-eight proposes that directors owe a duty of diligence to the company, but it doesn’t make enough interpretations about the key problems such as the concept, connotation and judgement standard of this duty,which making it difficult for judges to grasp the innate character of this very word, and,with no doubts, disorderly and chaotic situation penetrates the whole process of these trials.So,it is imperative to perfect the legal rule of diligence obligations of directors as soon as possible.First of all,if we make a comprehensive inspection about the intention of the legislators, company’s stage of development and special problems which actually exist in the judicial practice, it is not difficult to find that diligence obligation only includes the requirement of hard work in the current company law.However, owing to the dummy directors abound in state-owned enterprises and phenomenon of power abuse occurs frequently,the losses of company which these directors are working in is gradually expanding.It’s time to take measures to enforce directors to possess professional skills and carefully perform their duties.And then, if we made a expanding interpretation of the diligent duty, which aims at making this word have the multiple connotations of diligent,care and shill,the duty behaviors of directors could able to be better constrainted. Secondly, we should clarify the responsibility of directors, establish the sdandard of care and weigh the bottom line of shill under the guiding ideology of diligence,care and shill. In addition, to create a safe haven for directors in the specific field of business disicions,we can draw lessons from case law countries on the business judgment rule in order to ensure their freedom of decision making.Furthermore, in terms of our country’s judicial practice about the directors’ duty of diligence, there exists some problems such as the inconsistency of duty principle between legislative and judicial, irrationality of allocating burdens of proof and lacking of guarantee mechanism to perform diligence obligations.In face of these,what we should do is to fully consider the particularity of directors’ diligence obligation, establish major no-fault and minor fault duty principle, implement transferable mode of allocating the burden of proof, limit the compensation liability of losing director and compensate the litigation costs of winning director.