Standard Study On The Determination Of Directors Violating Their Duty Of Care

The directors’ duty of diligence as the important part of company management,while regulating the rights of directors,the interests of directors and the interests of the company are balanced.In 2005,the company law made a provision for the diligence obligation of directors.In 2013,the company law was amended substantially,but the provisions on the diligence obligation of directors were still only stipulated in section 147 of the company law,which did not define its connotation and extension as the duty of loyalty.Because the directors’ duty of diligence lack of standards and there is no corresponding supporting mechanism,makes it hard for industry compulsory provisions to guide practice,and become the "decoration".It has not been perfected by law,nor is it embody by judicial interpretation,thus leading to the fact that in the theoretical and judicial practice,what standard should be used when we determinate directors’ duty of care.On this issue,theoretical research has encountered difficulties and cannot continue,thus relevant judicial decisions have become the new research direction.Since the implementation of the "company law"in 2005,there have been thousands of judgment documents related to the violation of the duty of diligence by the directors,which have provided a good basis for the research.By analyzing the method of analysis and the method of literature,this article has analyzed the relevant laws,theories,and judicial practices of our country and the relevant theories and judicial practices of the outside world.On the basis of clarifying the advantages and disadvantages of each theory and theory,we find out the standard of judgment that the director should take to violate the duty of care and put forward the improvement suggestion on this basis.According to the above idea,this paper mainly carries on the following four aspects of the discussion.The first part mainly discusses the necessity of the research on the standard of the determination of the duty of the director.On the one hand,the relevant laws and regulations are not perfect,and even existing legislation has obvious defects.On the other hand,lack of legal norms on the judicial decisions of the courts,vulnerable to the same case in different regions,different levels of court get very different results,this is not conducive to judicial justice.One more thing,according to the principle of rights and obligations,the responsibility and interests of directors should be in a state of balance,so as to ensure that the directors will not move the company and shareholders"’cheese".This requires the law to define the limits of the directors’ duty of care and the standard of judicial determination to strengthen the restriction on the directors’ power.Therefore,it is the requirement of perfecting the legislation to study the standard of the determination of the duty of the directors,and it is the need to maintain the balance of the interests of the directors of the company,and it is also the requirement of the judicial practice.The second part analyzes the current situation of the directors’ duty of diligence in judicial adjudication.First of all,limitations of empirical data sources and data processing method is discussed,through data analysis and processing for a total of 752 sample cases,as in this paper,we study the first-hand information.Secondly,we will identify the standard types and analyze them.According to the case study,the standard of determination in judicial practice includes the following four categories:the ordinary prudent person pays attention to the standard,the good manager standard,the expert standard and the business judgment rule,and then discusses the proportion of each identification standard and the judgment thought of the court.The third part analyzes the advantages and disadvantages of these four categories and puts forward the author’s opinion.Based on the analysis of the second part,we find that these four standards mentioned above have their own limitations.In order to find a relatively reasonable standards,the deficiency of the standard were analyzed,finally think standard kindhearted administrator at the request of the degree of attention to directors on relatively more reasonable.But it belongs to the pure objective criterion,and it is more reasonable to combine with the subjective standard.Therefore,in the determination of whether the director violates the duty of care,the good manager standard should be adopted and the subjective aspects of the directors should be considered.In this way,we can make a comprehensive and reasonable evaluation of the performance of the directors,and realize judicial justice,which will also make the theory more consistent with the practice of the judges.The fourth part puts forward some Suggestions for the determination of the duty of care.First of all,the company law should be clear on the general criteria for the diligence obligation of directors.Secondly,it stipulates the specific requirements of the directors to perform their duty of diligence.Once again,our country to guide the foreign advanced experience for reference,such as the reference to the provisions of the English law will be different types of directors,also give the company’s articles of association of standards elaboration and the complementary rights.Finally,business judgment rules should be established.At present,some courts have used the commercial judgment rules to hear the case,and have used it as the basis for exemption from liability.In order to make the decision of the court legal and the application of the commercial judges is more standardized and reasonable,the business judgment rules shall be introduced appropriately and specified in our country.