The Analysis and application of Business Judgment Rule under Corporate Governance Structure

• Main Authors: Han-Che Huasng, 黃漢哲
• Other Authors: Chen-en Ko
• Format: Others
• Language: zh-TW
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/06078424584723099524

碩士 === 國立臺灣大學 === 會計學研究所 === 95 === Abstract: Fiduciary duty derives from Anglo-American legal system and argues that the relationship between directors of the company and shareholders is one kind of fiduciary relationship. In order to make the directors not to violate this relationship, the directors are asked to take the fiduciary duty. Since we did not have any related articles and provisions about fiduciary duty in our law system, we should refer to business judgment rule from Anglo-American legal system in order to judge whether the directors fulfill their fiduciary duty when doing business judgment. Business judgment rule is a case-law derived concept from Anglo-American legal system, which is a rule judging the negligence of the directors of a company when doing business decisions. The objective of this concept is to make sure that every party should respect the decision the directors made for business purpose in good faith and exempt the directors from personal duty when they make the decision independently while the corporation suffered loss. Under this rule, if the shareholders want to charge the directors, they have responsibilities to point out that the directors violate the five elements of business judgment rules. The five elements are(1)a business decision(2) disinterested and independence(3) due care(4) good faith(5)no abuse of discretion. Moreover, even if the behavior of the directors and officers matches these elements, they still have judiciary duty if the decision they made is (1) fraud, illegality or ultravires conduct (2) waste. In my opinion, our corporate law uses the abstract negligence to judge if directors or officers fulfill duty of care. However, our criterion for the negligence in civil law is under the foundation of Tort Law, which is based on the results of the consequence. This concept is different from emphasizing on the process of making the business decision under corporate law. Hence, we should discuss the directors and officers’ duty of care under objective and subjective perspectives and business judgment rule. In addition, for those behaviors violating duty of loyalty, such as self-dealing, using company opportunity, and appropriating the asset and information of the corporate, law-makers can make more specific explanations and regulations making reference to some scholars’ opinion. Also, law-makers can establish some declarative articles, such as, directors should do run business for the max benefit of the shareholders, or directors should make business decisions independently after acquiring sufficient information related with the issues. Directors are liable to the person who has material interest with the company. This duty should have limit, or the directors and officers will be easily accused of every decisions they made and the decision directors or officers made will become too conservative and cannot make the max benefit to shareholders. Therefore, we should introduce business judgment rule to reduce the considerations of directors and officers in order to make balance between economic efficiency and corporate governance when we are considering put more responsibilities on directors and officers.