Abstract

The directors of the company have duty of care, it should be diligent, cautious and careful in the fulfillment of the company's duties, and in line with the company's best interests to make the company's decision-making, to fulfill its oversight responsibilities. Because the director's duty of care concerns the director's due diligence and ability, it is difficult for the judicial practice to judge whether the director's duty of care is violated or not. However, the rules of the duty of care in the law of our country only refer to the concept of “duty of diligence”, and there are no other provisions. In addition, the judicial interpretation and case guidance system guidelines for our country's courts of law application, pay attention to the field of the duty also lacked. In our judicial practice, the obligation that limit as compliance and ultra vires, the tort responsibility mode as the only path. Therefore, it is necessary to examine and reconstruct the existing judicial obligation of the directors' duty of care in our country.

In this paper, there are two main points in the experience of American case law: first, the dichotomy between the duty of decision-making and the duty of supervision in the duty of care, and the focus of the trial of the court under their respective obligations; second, the application of good faith element in the judicial practice of duty of care. Based on the experience of American case law, this paper puts forward the double examination mode of “information” and “procedure”. Under the director's duty of decision-making, “information”focusing on elements of directors in decision-making are knows or ought to know the information, review the information can indicate whether the board of directors to make the best interests of the company and the shareholders of the careful consideration in decision-making; “procedure”focus on the adequacy of the negotiation, discussion, and negotiation procedures adopted by the directors in the decision-making process, and whether the board to obtain relevant information, so as to make their decisions based on fully informed. Under the director's duty of supervision, “information”focus on whether or not the directors know or should know the “red flag” information, and in the case of knowing or should know the “red flag” information whether to take effective supervision measures; The “procedure” focuses on whether the directors have established internal control systems for collecting and reporting information within the company, and whether the directors are working effectively in the internal control system. The basis for all the above review points is whether the directors act in good faith and on the basis of the interests of the company and the shareholders.

This paper is divided into five parts as follows：

In the first part, the author makes a survey on the practical operation of the judicial determination of the directors'duty of care in our country. Combing through discovery, our court has the following problems in the trial practice: the duty of care that is confined to the illegal and ultra vires, cases in which the business judgment rules are used are lack of necessary judgment reasoning, some of the cases did not differentiate the duties of loyalty and care.

In the second part, the author puts forward that the experience of American case law is used as a reference for the improvement of the existing problems in the judicial determination of the directors'duty of care. The above points are helpful to optimize the judge's thinking, determine the standard of responsibility, and clarify the connotation and extension of the duty of care.

In the third and the fourth part, this paper classifies and analyzes the two main points of reference in the American case law, and compares the Chinese and American cases. In the third part, the author makes an analysis of the duty of decision making in the directors'duty of care, and the directors'decision-making obligations are divided into two parts: to fully and carefully make the obligation of the company's general decision-making and to fully and carefully make the obligations of the company's control decisions. In the third part, the author makes an analysis of the duty of supervision the directors'duty of care, and the director's duty of care can be divided into the obligation to supervise the daily operation of the company, the obligation to supervise the compliance of the company's information disclosure, and the obligation to supervise the business risk of the company

In the fifth part, the author puts forward some suggestions on how to recon-struction the duty of directors in china. In this part, the author points out that the judicial cognizance of the director's duty of care in our country can be examined by “information” and “procedure”. In the mode of double examination, good faith is the standard of the director's responsibility, and the application of the standard of good faith must take into account the objective standards, and the application of good faith as an indirect path to the introduction of business judgment rules.

Key words: Director Duty of Care Good Faith