The Study Of Directors’ Duties In Company’s Donation

Nowadays company donation has already become an important way for a company to take over the social responsibility. With the development of our society, more and more companies realize the increasing importance of their social responsibility. For our society, the donation can contribute to the social welfare, which is essential for the stability of society. For companies, they also benefit much from their donations, for example, improving their internal group cohesiveness and external fame. However, there are still some exceptions, those consider the donation as a effective way to earn more money but not their social responsibility. Especially some donation behavior has already broken the law, which is the negative side of company donation. Unfortunately, in our current legal system, there is no clear rule which can standardize the company donation. Therefore, in this thesis, we aim to clarify the social responsibility system of one company, raising four parts as follow:First of all, we introduce the definition, meaning and worth of company donation. This behavior is only considered as a contribution to social welfare. Herein, we investigate the definition of company donation in other countries and based on this, discuss the characters of this special donation behavior. Then, we present the social wealth of company donation from points of view of its social value and human value.Secondly, we illustrate the type of director duty and cases which violate the director duty. We emphasize the legal behavior of company donation for those violating the director duty. The director duty consists of two sub-duties in this thesis:the loyalty duty and diligence duty. Referring to the definition of director duty in the judicial practice of other countries, we suggest that the company donation should consider both its benefit and public purpose in the process of making donations.The third part mainly contains rationality and usiness-judgment principles, which are well accepted in Japan and the USA. We analyze the range of practical company-donation behavior which satisfy the above principles, discuss the rationality on the objective, count and purpose of company donation. We advice that the judgment of director’s donation behavior should depend on the relation between the company’s operation and its donation.Finally, we point out the defect of our legal system in the field of company donation, as Chinese legislation currently lack in the clear definition of director duty in the process of company donation. In this part, we list the responsible principals for the director duty in the "Company Law" and other relevant regulations. Several proposals are put forward to improve the system of director duty, including constructing the check and balance mechanism and constrain mechanism in internal board of directors by means of well-known business-judgment principle. We expect to improve the agency cost of director and better protect the benefit of shareholder and director.