Limited Liability Of Independent Director

With the continuous development of the market economy and the increasing enthusiasm of companies as market participants,there has always been a lively discussion on corporate governance in both academic and theoretical circles.The "Guiding Opinions on Establishing the Independent Director System of Listed Companies" issued by the China Securities Regulatory Commission in 2001 marked the formal establishment of the independent director system in China.It has been more than ten years since China's listed companies introduced the independent director system,but there are still some problems in the independent director system in China,and there is still a long way to go to improve the independent director system.In 2001,when the China Securities Regulatory Commission decided to implement an independent director system for listed companies,although it made certain provisions on the rights and obligations of independent directors,it did not distinguish between independent directors and executive directors on legal liability issues.There is no mechanism for limiting and exempting the legal liability of independent independent directors.Therefore,in recent years,it is not uncommon for independent directors to assume obligations and responsibilities in practice,and sometimes they also bear the same legal responsibilities as executive directors' punishment.Therefore,the theoretical and academic circles have begun to pay attention to the limited liability of independent directors.In practice,certain duties of independent directors should be restricted or exempted by legal principles.However,due to the vague legal regulations on the limitation and exemption of the liability of independent directors in China,there are few cases where the liability of independent directors is restricted or exempted.As a result,the professional risks of independent directors are increasing,and independent directors will be greatly affected in handling company affairs and decisions.This article starts with the composition of the liability of independent directors and the status quo of independent directors' responsibilities,and analyzes the relevant systems of independent directors' liability limitation in other countries.Based on the actual needs of China,this paper discusses the problems and solutions of the independent directors' liability limitation system.There are four parts.The first part is the theoretical basis of the limited liability of independent directors.The origin and development of the responsibility of independent directors are systematically sorted out.Then introduced the obligation of independent directors is the prerequisite for independent directors to assume responsibility.Legal obligation is an important basis for legal responsibility and the prerequisite for legal liability.To explore and study the limited liability of independent directors,we must attach importance to independent directors.Voluntary research and analysis.As far as the situation in China is concerned,the independent directors of our country mainly include the duty of diligence,the duty of loyalty,and the special duty.Finally,the legal basis of the limited liability of independent directors is introduced.The second part is the practical needs of limited liability of independent directors.Starting from the status quo of independent directors 'responsibilities,we investigate and study the status quo of the legislation of independent directors' responsibilities in China.According to the analysis of China's existing laws and regulations,it can be seen that,on the whole,the provisions on the responsibility of independent directors have not been systematically legislated Regulations are scattered in laws and departmental regulations,which seem to be more fragmented.It is worth noting that,whether in the "Company Law" or "Securities Law",there is no separate regulation on the liability of independent directors.Instead,both independent directors and executive directors are stipulated together in terms of obligations and responsibilities.Both apply the same standard.Through reviewing the punishment decision of the Securities and Futures Commission and expounding the actual status of the specific case of naming independent directors in practice,the author expounds the actual needs of the limited liability of independent directors in China and the positive significance brought by the limited liability of independent directors.The third part is a comparative study of the limited liability of Chinese and foreign independent directors.Through comparative analysis,the representative countries of the common law system and the civil law system,the United States and Japan,were selected for comparative analysis and research,and the relevant content of extraterritorial legislation was introduced in detail.A comparative analysis of the shortcomings and deficiencies of China's current system,Japanese law clearly stipulates the legal liability of independent directors who fail to perform their due obligations.Japan also provides a relatively complete system of restrictions and exemptions on the liability of independent directors.The purpose is to place independent directors with lighter legal responsibilities than other directors to ensure that more competent executives can reduce concerns about being an independent director.Under US law,the duties of independent directors include signing legal documents and board resolutions,as long as they are reviewed based on their own capabilities and experience and based on information provided by the company or information provided by certain professionals(such as certified public accountants,lawyers,etc.)can.Even if the final judgment is wrong,it will bring certain losses to the company and the independent directors will not bear any responsibility.Therefore,the system greatly reduces the risk of appointment of independent directors.The fourth part is the limited institutional design of independent directors.Judging from China's current independent director system,independent directors are an important part of the governance system of listed companies.Although many independent directors have been authorized at the legislative level,due to their limited remuneration and limited information sources,and in practice independent directors are mostly part-time.Therefore,they can only participate in the company's specific affairs to a limited extent.From the actual operation of China's independent director system,it is not a practical way to increase the enthusiasm of independent directors by increasing responsibilities.It may lead to the loss of outstanding talents and is not conducive to improving the quality of the independent director group.Therefore,based on the actual situation of the current independent director system,it is necessary to appropriately limit the duties of independent directors and create a relaxed environment for their duties.In order to increase the motivation of independent directors,based on the analysis of theoretical and actual conditions,the author made a comprehensive comparison of relevant foreign systems,absorbed foreign references,combined with China's actual situation,and proposed the responsibility of independent directors Relevant paths for restrictions and exemptions,and issues to be aware of during implementation.