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Vanke donated door "event to see the company's charitable giving decision-making body

Author: TangLin From: www.yourpaper.net Posted: 2009-12-15 15:16:49 Read:
[Abstract] In this paper, Vanke donated door "event, for example, trying to find the best decision-making body of the company's charitable donations from the conflicts of interest of the shareholders' meeting and the board of directors. On the basis of the results of theoretical studies of corporate social responsibility and the Board centrism, such as the Articles of Association convention, the Board will be the best decision-making body of the company's charitable donations.
[Keywords] the the charitable donation decision-making body corporate social responsibility of the Board of Directors centrism

, Vanke donations door event

May 12, 2008 Wenchuan earthquake occurred the same day, the Vanke Headquarters donated 2 million. May 15, Wang personal blog responded that 2 million is the authorization of the Board of Directors, and is a disaster-prone country, the Disaster Relief charity event is the norm, the donation activities should be sustainable, rather than become a burden. "May 21, Vanke bulletin board resolution, the resolution in the next 3-5 years, according to actual needs, plans to participate in the temporary placement of the earthquake-stricken areas in Sichuan in the amount of 100 million yuan of net expenditure, and post-disaster recovery and reconstruction efforts, Mianzhu City compliance Road Town, as the focus; the work of a pure public good nature, and does not involve any commercial development (including low-profit project). The company decided the 2008 first extraordinary general meeting held on June 5, the Board of Directors on this resolution to the attention of the shareholders' meeting approved. After the resolution by 99.8% of the vote.
Donation activities belong to the scope of the company's financial budget shall be submitted to the board of directors included in the annual budget reported shareholder approval (there are some companies, mainly H-share companies, budgets are not reported to the approval of the shareholders' meeting, only the approval of the board of directors, only the approval of the general meeting accounts for the previous year). For the donation, the number of companies included in the annual budget expenditure in certain subjects, there are some companies certain limits to management authorized by the Board, that the management of extra-budgetary discretion to make some spending decisions. In any case, acting within the purview of the board and management should be dealing with donation matters. Vanke board of directors is said to have 10 million donation limits, the beginning of the year when the snowstorm has donation go 8,000,000, therefore Wenchuan earthquake when the remaining 200 million donation amount available. Therefore, although Vanke May 12, only a mere 2 million donation, we should also expressed his understanding, 200 million for the earthquake a small contingent behind the development system act is company system since priceless.
However, confusing, Vanke board resolution in subsequently claimed will be donated in the next 3-5 years 100 million for post-disaster reconstruction, assessed by an annual average, the annual donation limit has far more than the Board of Directors decision limits. Although the company has decided to hold a shareholder meeting on June 5, approved by the Board of Directors resolution, in order to avoid possible legal problems. However, in practice, the shareholders' meeting at this time does not have much option. If it is not approved, it would be Vanke attracted condemning. Taking into account public opinion under the company's reputation and stock market prices, the shareholders approved a $ 100 million donation is wise. On the surface, the 1 billion donation decision-making body is the general meeting, but the actual decision-making body is the Board of Directors.

Second, the shareholders' meeting and the decision-making powers of the board of directors of conflict

Articles of charitable donation limits circumstances there is no agreement, or charitable donations in excess of the Articles of Association convention who are going to make decisions? Some people think that the shareholders' response to the company's charitable donations have decision-making power. Different view to establish the image of the company is also the company's charitable donations to improve the visibility of a way to achieve their own business objectives, therefore, from the point of view of the company, the Board also reserves the right to determine whether the company donated. Well, the shareholders' meeting and the board of directors, who do donate decision-making is more reasonable?
1905 Worthington v. Worthington case, Worthington donated $ 12,000 worth of equipment to the Columbia University Engineering Laboratory. The minority shareholders prosecution claimed the chairman donated destroyed their fiduciary duties to shareholders. The court held that the company chairman took away the property of the company but not for anything in return, the judgment has lifted the company's charitable donations.
1953 AP Smith, Manufacturing Co v Barlow's case, the the AP Smith company's board of directors decided to donate $ 1500 to Princeton University. This behavior caused the dissatisfaction of some of the shareholders, the company filed suit seeks declaration to confirm the legality of the donation. The court of first instance to support the plaintiff, shareholder appeal. New Jersey High Court upheld the verdict. The Court of First Instance pointed out, very important "non-governmental educational institutions of democracy and free enterprise mechanism, blocking reasonable restrictions donation will be a serious threat to their survival," the appellant "does not deal with today's reality turned a blind eye, should not object to have long-term perspective of corporate behavior. "
The American Law Institute in May 1984 by the principles of corporate governance: analysis and recommendations ", 2.01: companies engaged in commercial activity, should be targeted to enhance the company's profits and shareholder interests. But one of the following circumstances, may not be considered company profits and shareholder interests to be raised: ... (2) the conduct of operations, consider a generally accepted ethical factors to bear the responsibility of society; (3) for public welfare , humanitarian, educational and charitable purposes, and in a reasonable donation. From the History of American jurisprudence, the decision-making body of the charitable donations has undergone changes from the shareholders to the board of directors. I also agree with the Board of Directors as the donation decision-making body of the convention of the articles of association without, for the following reasons:
(A) corporate social responsibility (ownership socialization)
With the increasing expansion of the private ownership of social wealth differentiation serious social problems have become increasingly prominent in the late 19th century and early 20th century, followed by a new legal thought, that the socialization of ownership. The German jurist Jhering: the purpose of the exercise of ownership, not only for the interests of the individual, but also for the interests of the community; therefore, should be based on social ownership system to replace the system of individual ownership. Socialization of ownership with the provisions of Section 2.01 of the American Law Institute, a similar effect. The provisions of Section 2.01 of the American Law Institute, pointed out that the company's social responsibility, and its essence is the socialization of ownership. The company not only manifestations of shareholder wealth, more representative of the social wealth. The company not only exist to maximize shareholder value, and also charged with the responsibility to enhance the interests of the community. If so, then the company's charitable donations can not be viewed simply as equity against.
(B) The Board of Directors centrism
As the socio-economic development, the rapidly changing business information, the earlier shareholders to make decisions for the company's hands-on management style has been unable to meet the demand for the company's development, the "Shareholders centrism gradually changes to the Board of Directors centrism.
"Centrism" of the Board of Directors that the board of directors and the shareholders are the company authorities, built by the company's Articles of Association and the Companies Act of the pattern of distribution of power, in order to seek the appropriate balance between the efficiency and fairness of the parties to the contract, ... the Board of Directors party reduced to the executive body of the shareholders' meeting, the company is not only efficient, completely lost, and the fair value of the pursuit may be gone ...... Companies Act should provide "In addition to the law and the Constitution otherwise requires, the Board is entitled to the company's management rights" that the Board enjoys broad powers of the management company, this has economic rationality.
If the articles of association have agreed from the Articles of Association convention. If the articles of association there is no agreement, the directors general operation and management decision-making power should not be excluded charitable donations to the decision-making power. While the agency costs that may be included in charitable donations, and other factors can be avoided by other means, such as to reduce the fiduciary duties of directors, corporate governance oversight mechanisms to constraints. This is the same with the directors of other operating decisions.
Foreign donations, with the company's external security is different, although the same for the company's external payments, contingent external guarantees of the Company Shareholders Centrism is because foreign guarantees are not part of the the conventional management decision-making, does not have the advertising characteristics, it has substantially increased the company's financial risk. The company's external donations and advertising can enhance the company's reputation as a management decision-making, not too take centrism of the Board.
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