Research On Fiduciary Duty Of Controlling Shareholders Under Differentiated Voting Rights Structure

With the development of the trend of shareholder heterogeneity,the shareholding structure of "one share,one right" adhered to by the traditional company law theory has been broken,and a differentiated voting rights structure has emerged.As a control strengthening mechanism,it is in line with the trend of shareholder heterogeneity and provides institutional options for realizing the vision of entrepreneurial characteristics.However,under the differentiated voting rights structure,the mismatch between the control and the remaining claim rights may cause the risk of abuse of control.At the same time,the system breaks the original balance of interests within the company,triggers a diversified and complex pattern of internal conflicts of interest.Under this structure,the original internal supervision mechanism and external control market supervision mechanism are difficult to play a role,and corporate governance is facing challenges.In order to curb the abuse of control by controlling shareholders,China’s Company Law needs to respond to the needs of corporate governance and strengthen the regulation of the responsibility of controlling shareholders.The controlling shareholders should be included in the scope of fiduciary duty regulation and made to assume corresponding fiduciary duty to balance the company’s benefit distribution pattern.The modern fiduciary duty theory arises from equity,and its essence is to balance the interests of the settlor and the trustee,and to rescue the settlor in a weak position.The traditional fiduciary duty theory in China’s Company Law is based on the theory of separation of ownership and control,the equity allocation model of "one share,one right" and the assumption of shareholder homogenization,but these assumptions deviate from and are misaligned with corporate practice.Under the differentiated voting rights structure,the controlling shareholders are in a dominant position in decisionmaking and operation because they hold control,while other non-controlling shareholders are in a relatively weak position.There is a fiduciary relationship between the two with trust as the bond,which is the logical basis for the regulation of controlling shareholders with fiduciary duty.At the same time,the theory of fiduciary duty to control shareholders is not a "castle in the air",but is based on the theory of substantive equality of shareholders,the theory of principal-agency,and the theory of prohibition of abuse of rights.Whether from the perspective of China’s "shareholders’ centrism" governance model or from the perspective of conflict of interest,it is necessary to establish a system of fiduciary duty of the controlling shareholders.At present,China’s legislation and judicial practice have obvious deficiencies in the regulation of controlling shareholders.At the legislative level,the subjects of Fiduciary duty in China’s Company Law are still limited to directors,executives and other management.The regulation of controlling shareholders is limited to vague provisions prohibiting abuse of rights,and there are gaps such as low legislative level,unclear scope of subjects,and ambiguous regulatory methods and contents,which are difficult to meet the market’s demand for a controlling shareholder restraint mechanism,and become a shackle to the development of differentiated voting rights structure.At the level of judicial practice,there are also limitations such as the lack of basis for claim rights,inconsistent recognition standards and imperfect litigation mechanisms,which hinder the improvement of corporate governance efficiency and the development of new business formats.In order to solve the problem of insufficient regulation of controlling shareholders,it is necessary to base on local practice,clarify the regulatory subjects,obligations and specific contents,and form a fiduciary duty system with national characteristics for controlling shareholders.First,the controlling shareholder should be clarified as the direct regulatory subject of fiduciary duty,and the company and other shareholders should be the objects of obligations;Second,the duty of loyalty and duty of care should be the main framework,and the content of the fiduciary duty of controlling shareholders should be constructed that is different from the fiduciary duty of directors.Among them,the core of the duty of loyalty lies in the prohibition of conflicts of interest,and the duty of care needs to consider the application of commercial judgment rules.At the same time,the "safe harbor principle" is used as the guidance of judicial review rules to control shareholders’ fiduciary duty,and while ensuring the fairness of judicial review,the judicial authorities are given appropriate discretion to enhance the flexibility and adaptability of the system;Finally,it is necessary to establish a specific and feasible system for pursuing the liability of controlling shareholders for breach of trust,clarify the applicable rules for the way to bear the liability for damages and the attribution of interests,and build an effective litigation mechanism to strengthen the relief of noncontrolling shareholders through the improvement of direct litigation and shareholder representative litigation mechanisms.