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Directors' Duties in China

Published online by Cambridge University Press:  28 March 2013

Guangdong Xu ,
Tianshu Zhou ,
Bin Zeng  and
Jin Shi
Guangdong Xu
Affiliation:
Guangdong Xu is Associate Professor of Law and Economics at the Research Center for Law and Economics (RCLE) at China University of Political Science and Law (CUPL); Tianshu Zhou is Assistant Professor at the RCLE; Bin Zeng and Jin Shi are PhD candidates at the RCLE. We would like to thank Rainer Kulms and anonymous referees for their helpful comments.
Tianshu Zhou
Affiliation:
Guangdong Xu is Associate Professor of Law and Economics at the Research Center for Law and Economics (RCLE) at China University of Political Science and Law (CUPL); Tianshu Zhou is Assistant Professor at the RCLE; Bin Zeng and Jin Shi are PhD candidates at the RCLE. We would like to thank Rainer Kulms and anonymous referees for their helpful comments.
Bin Zeng
Affiliation:
Guangdong Xu is Associate Professor of Law and Economics at the Research Center for Law and Economics (RCLE) at China University of Political Science and Law (CUPL); Tianshu Zhou is Assistant Professor at the RCLE; Bin Zeng and Jin Shi are PhD candidates at the RCLE. We would like to thank Rainer Kulms and anonymous referees for their helpful comments.
Jin Shi
Affiliation:
Guangdong Xu is Associate Professor of Law and Economics at the Research Center for Law and Economics (RCLE) at China University of Political Science and Law (CUPL); Tianshu Zhou is Assistant Professor at the RCLE; Bin Zeng and Jin Shi are PhD candidates at the RCLE. We would like to thank Rainer Kulms and anonymous referees for their helpful comments.
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Abstract

This paper examines the development of the legal framework regarding fiduciary duties of directors in China. The concept of fiduciary duty was introduced by the 2005 revisions to China's Corporate Law. The implementation of fiduciary duties in China has encountered considerable obstacles because of the inherent weakness of the legal system. The legal texts are simple, vague and rigid. In the enforcement process, formalised judgments have placed limitations on precedent creation, thus reducing the deterrent effect, and the judicial system has shown reluctance to intervene in matters related to directors' duties in listed companies. There have been improvements, however. In a limited number of judicial decisions, courts have attempted to more clearly define the meaning of directors' fiduciary duties. In the penalty decisions of the China Securities Regulatory Commission (CSRC), the duties of directors have been interpreted in a more sophisticated manner.

Keywords

Keywordsfiduciary dutiesChinacorporate lawcourtssecurities authorities
Type
Articles
Information
European Business Organization Law Review (EBOR) , Volume 14 , Issue 1 , March 2013 , pp. 57 - 95
Copyright
Copyright © T.M.C. Asser Press and the Authors 2013

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