| Summary: | 碩士 === 中原大學 === 財經法律研究所 === 93 === Corporate directors owe fiduciary duties to the corporation they serve and its shareholders. These fiduciary obligations include the duty of loyalty and the duty of care. Besides, director’s duty of care can be divided into two parts-- the decision-making function and the oversight function .Both of them have different context and standard. In a decision making context, the business judgment rule applies to alter and to limit the duty to one of process. In a non-decision making or oversight context, however, the business judgment rule will not apply most of the time.
The business judgment rule affords directors protection and encourages directors to engage in ventures which have potential for the corporation but at the same time entail some risk. If directors conduct the corporate business in compliance with elements of the business judgment rule, the rule protects both the directors from liability for damages stemming from their decisions and the decisions they make.
In addition, the corporation in the conduct of its business, like all natural person, is under an obligation to act withtin the boundaries set by law. In other words, directors have an obligaions to oversee the daily operation of the corporation in compliance with the law when discharging their duty to monitor. Further, directors are obliged to establish law compliance systems which will assist them to monitor the corporation’s daily business and affairs and to ensure the conporation’s compliance with the law.
Finally, the last chapter discusses the elements of shareholder derivative suits. It first introduces the shareholder derivative suits in the U.S. and Japan, and then compares them with Taiwan’s derivative suit. Demand on the board of directors is the main focus of this part, discussing relevant questions regarding demand excused, demand refused and use of independent committee.
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