Re-examination of the Normative System of Directors'Duty of Loyalty
The Corporation Law amended in 2023 systematically reconstructs the norms of directors'duty of loyalty to form a normative group of directors'duty of loyalty with unambiguous concepts,clear logic and harmonious system.In the external system,the directors'duty of loyalty has independent normative value,and its insititutional positioning is significantly different from the directors'duty of care and duty of good faith.In terms of internal system,the Corporation Law amended in 2023 establishes a dual normative approach of duty of loyalty on the basis of distinguishing between conflicts of interest behaviors and potential conflicts of interest behaviors.Conflicts of interest behaviors are absolutely prohibited,while potential conflicts of interest behaviors can be implemented after procedural review within the corporation.As the legal consequence of directors's breach of duty of loyalty,whether it is regarded as the way to determine the amount of damages or an independent form of liability,it will not have a substantial impact on the protection of corporate interests.
duty of loyaltyfiduciary relationsconflict-of-interest behaviorssubstantial fairness doctrinedisgorgement damages
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