The Legal Construction of Exculpatory Provisions Pertaining to Director's Liability
Due to the reality that Chinese corporate directors are facing increasing legal risks and the lack of liability limiting or eliminating institutions in 2023-version Chinese Corporate Law,Chinese corporations should consider to add exculpatory provisions in their corporate bylaws to limit their operating cost and recruit and retain their directors.However,because there is no provision in corporate law to regulate this kind of provisions,their legitimate and effects are very uncertain.Responding to the so-called insurance crisis,the Delaware General Corporation Law firstly recognized exculpatory provisions in 1986.Due to the huge theoretical and practical debate brought by it,the other model laws or state corporate laws not only adopted it but adjust it to their need to varying extent.Combing experience from comparative law and the local legal background,the future Chinese Corporate Law should recognize the legitimacy of exculpatory provision,set it as an opt-in default rule,take example of other-than provisions in MBCA rather than Delaware and abolish the common practice that allowing bylaws to eliminate director's whole liabilities.
Director's LiabilityExculpatory ProvisionsDuty of LoyaltyDuty of CareDuty of Good Faith
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维普
