Unit 5

Directors, Officers, and Controller Duties

Compare loyalty, diligence, conflict transactions, de facto control, controller liability, and comparative fiduciary-duty standards.

Before seminar

Prepare Unit 5: Directors, Officers, and Controller Duties

Work through these public materials before class. The sequence keeps source reading before problem analysis and does not include model answers.

43 linked materials

Core law: 11
Cases: 7
Readings: 24
Exercise: 1

1
Core law
Read core legislation and rules

Start with the statutory, regulatory, and judicial materials that frame this unit.
2
Cases
Review linked cases

Identify the facts, holding, and remedial move before turning to commentary.
3
Readings
Compare readings

Use scholarship, practice notes, and comparative materials to test the Chinese-law position.
4
Exercise
Attempt the public exercise

Apply the sources to a problem before looking at seminar discussion prompts.
- Director Conflict Memo

Reflection prompts

Which rule or case controls the hardest issue in Unit 5?
Where would a Hong Kong, Delaware, UK, Singapore, or transnational comparator change the analysis?
What extra facts would you need before advising a director, shareholder, creditor, or regulator?

Introduction

This unit asks what it means to manage another person’s corporate property. Students compare Chinese duties of loyalty and diligence with Delaware oversight and duty-of-care doctrine, while paying attention to controllers and shadow decision-makers.

Key Legal Issues

Duties of loyalty and diligence under the revised Company Law.
Conflict transactions, corporate opportunities, related-party dealings, and controller influence.
Liability of directors, supervisors, senior officers, actual controllers, and de facto directors.
Special tension for state-invested companies and dual loyalty.

Hypotheticals

A controlling shareholder directs the board to approve a related-party purchase at an inflated price.
Directors ignore repeated compliance warnings before a regulatory fine.
A state-invested company director claims the state investor’s instruction overrides the company’s interest.

Legislation

Use the Company Law’s duty, controller, and transition provisions together with Interpretations IV and V. State-owned asset instruments supply the public-asset overlay. The CSRC governance, disclosure, independent-director, and State Council reform instruments show how duty questions intensify for listed companies.

Cases

Caremark and Van Gorkom are comparative anchors for oversight and board process. They should be contrasted with Chinese statutory language rather than imported wholesale.

Readings

The readings combine doctrinal, empirical, and comparative accounts of fiduciary duties. Use Howson, Xiong, Lin, and Wang to test how far common-law ideas travel into Chinese law; use Hines and the liquidation-duty reading to examine dual loyalty, distress, and creditor-facing responsibility.

Unit materials

Legislation

law Mainland China English version

Company Law of the People's Republic of China (2023 Revision)

中华人民共和国公司法

The core statute for Chinese companies, covering legal personality, registration, capital, corporate organs, directors' duties, state-invested companies, bonds, accounting, restructuring, dissolution, liquidation, and liability.

Authority: National People's Congress
Citation: Revised 29 December 2023; effective 1 July 2024
Date: 2024-07-01

Source English version

judicial interpretation Mainland China Translation unavailable

SPC Provisions on the Temporal Effect of the Company Law

最高人民法院关于适用《中华人民共和国公司法》时间效力的若干规定

Guidance on how courts apply the 2023 Company Law to disputes involving facts, legal acts, or legal relationships that straddle the law's effective date.

Authority: Supreme People's Court
Citation: Fa Shi; effective 1 July 2024
Date: 2024-07-01

Directors, Officers, and Controller Duties

Prepare Unit 5: Directors, Officers, and Controller Duties

Read core legislation and rules

Review linked cases

Compare readings

Attempt the public exercise

Reflection prompts

Introduction

Key Legal Issues

Hypotheticals

Legislation

Cases

Readings

Legislation

Cases

Readings