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Analysis of the company's shareholders will be with the Board the right boundaries

Author: LvHuiJuan From: www.yourpaper.net Posted: 2010-04-29 22:25:56 Read:
Paper Keywords: lines of authority of the Board of Directors of the shareholders' meeting corporate governance
Abstract: the shareholders' meeting and the amount of things the game is a key part of the company's governance. How to resolve the gray areas for both the distribution of power? The power conflicts arising how to determine it? Paper argues that shareholders should only company specific transaction in decision-making, and other decision-making power of the business and affairs of the Company shall be owned by the Board of Directors and exercise. Specific criteria for the classification of one of the company's business scope limited; Second for the use of the "business judgment rule".
The modern enterprise system With shareholders increasingly internationalization and diversification, corporate governance, structure centrism from the shareholders' meeting to the evolution of the Board of Directors of centrism greater degree of control by the Board of Directors. This will inevitably bring conflict between the interests of the shareholders of the Company and the Company, the Company operators. As a result, the power game of the shareholders' meeting and the board of directors to seek balance the interests of the company, shareholders and company, improve corporate governance, a key ring, but also affects the efficiency of the company.
A shareholders' meeting and the positioning of the powers of the board of directors
Business risk is primarily borne by the shareholders, whether good or bad, with the interests of shareholders company can achieve a direct relationship between shareholders' meeting as the company's decision-making bodies is necessary of the interests of the shareholders, but also to protect the basis of the shareholders' rights.
As the shares of decentralization, diversification of shareholders, there has been a small number of large shareholders control the company's situation. For a large number of small shareholders, in terms of knowledge, time, money, and other factors limit the impact of the company is weak, the interests of the company, controlling shareholders and minority shareholders highlights. In this case, the independent status of the Board is affirmed, the Board of Directors in accordance with the law by the election of the shareholders 'meeting, on behalf of the company and the permanent organ of the exercise of the decision-making power of the operation of the company, the implementation of the shareholders' meeting, shareholders will be responsible for, but the limits prescribed by the law and the Articles of Association within vested with independent powers, specifically responsible for the corporate decision-making.
Second, the United States, Britain, the Companies Act in the shareholders will be configured with the powers of the board of directors
Anglo-American case law that the Constitution otherwise requires, transaction management rights of the company by the board of directors exclusively entitled to the general meeting of the shareholders of the Company can control the only way is to amend the company charter granted by the Articles of Association of the powers of the Board, or Articles of Association, they can by refusing to vote for him for the directors, they themselves can not usurp the articles of association granted any of the powers of the Board of Directors. Anglo-American company law, the general management of the company is vested in the Board, in addition to the company to develop the reserve powers of the Law and the Articles of Association of the Company shareholders will enjoy.
Law in China in the shareholders will be determined with the Board and the lines of authority and practical advice
The shareholders 'meeting shall have decision-making power of the major management matters, one of the terms of reference of the Board of Directors of the implementation of the resolutions of the shareholders' meeting, at the same time enjoy the decision-making power of the business and affairs of the Company. Well, in the the actual operating decision-making process, the shareholders' right to decide with the Board's decision-making power, not absolute diameter Wei distinct, very easily lead to confusion of power, or compete for the decision-making power, or in order to push each other lure responsibility.
Well, from the perspective of the specification for how to resolve the gray areas of both the distribution of power?, The Companies Act and the Articles of Association of the Company to undertake this task, and both have different emphases. Companies Act focuses on providing a range of judgment rule to provide guidance and relief for preliminary basic definition of the two powers. However, concrete boundary points listed both powers should be the focus of the company's articles of association. Because apparently only company knows best how to further refine the two powers within the limits of the law. At this point, the "Company Law" can not be smarter than the parties. from the wording of the Companies Act, the decision of the shareholders' meeting for the "business policy and investment plans, the decision-making power of the Board is for business plans and investment programs. According to the general understanding of the meaning of the decision of the shareholders will be on a more macro level, significant operational matters for the company. Nuances in the wording of this legislation is to provide instructions on the direction of specific exercise of power to determine the scope, the lack of practical judgment operability not contain detailed provisions in the Articles of Association, the the power conflicts arising determine how Nick?

First, the shareholders' meeting should only be made in respect of a particular transaction in companies operating in the decision-making, and other decision-making power of the business and affairs of the Company shall be owned by the Board of Directors and exercise. This is in line with the basic idea of ??the pursuit of efficiency and safety of commercial law. Day-to-day business affairs of the company is very cumbersome, requires flexibility and control over decision-makers, the timely and correct decision. However, the shareholders' meeting convened to convene, decision-making has a strict legal procedure, the time span is relatively long, plus the shareholders are not directly involved in the day-to-day operations of the company, the situation, the situation is not clear, especially in the case of an emergency, you may delay time, the losses caused to the company. Furthermore, the company as a knowledge aggregation, it is through the process of accumulation of knowledge for new knowledge into the company into a dominant force in corporate development. Therefore, the internal knowledge accumulation of intellectual capital resources the company has been over the interests of the key. compared to shareholders, directors to understand more market information and business information, and more correct decision to make the interests of the company.
Further, for a specific division shareholders will be standard operating limits of the sleeve of a robe making power with the Board, I think: one for the company's business scope limited. The commercial activities of the company operating outside the scope of the provisions in the charter or public welfare behavior, in principle, the Board is not entitled to make decisions. Because the articles of association is autonomous charter of the company, not only constraints of the legal relationship between the internal stakeholders, and constrained the company's external behavior. Behavior of the breakthrough companies operating range, remove the commercial risk aside, is likely to be company managers and some interest groups manipulated results may bring great loss for the company, while the final risk borne by the company's shareholders. Therefore, in addition to the shareholders will make a special resolution of these acts, the company should not make these acts. But there are exceptions, and that if a behavior is beyond the company's business scope, but this behavior is related to the operations of the subsidiary activities, that the Board has the power to make decisions.
The other is the use of the "business judgment rule". The use of this rule is to protect the board of directors should be the decision-making power of the company's day-to-day conduct of operations. Commercial business judgment rule specifically: the board of directors in good faith and fully understand the relevant information for the best interests of the company made a business decision, even with hindsight, the decision-making mistakes or to bring the damage, the court Disclaimer directors made the decision to give, and not be held accountable for their responsibilities. Director or officer of the business judgment of goodwill on the basis of the following three conditions are met, it is considered in accordance with the description of the corporate governance program drafted by the American Law Institute, made honestly fulfill the obligations of the Company under this heading: (1) he object to the decision-making no disinterested; <2) aware of the decision-making object of the situation at that time, he has reason to believe to the appropriate extent; (3) that the decision-making in line with the best interests of the company . According to the rules, the Board of Directors based on reasonable information, professional ability and insight to make reasonable judgments and decisions should not be blocked by shareholders, shelved or attack, unless there is evidence that the breach of the statutory or Articles of Association of the Company under the duty of care or fiduciary duty.
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