ENFORCEMENT Part Two LIU Zhenzhen May30,2014
ENFORCEMENT Part Two LIU Zhenzhen May 30, 2014
Content Section 1 General Introduction Section 2 Outside Director Liablity -Section 3 Shareholder Derivative Suits -Section 4 Conclusion Reference: Outside Director Liability Across Countries (P140) Why Do Shareholder Derivative Suits Remain Rare in Continental Europe?(P150) Page·2
Page 2 Content Section 1 General Introduction Section 2 Outside Director Liablity Section 3 Shareholder Derivative Suits Section 4 Conclusion Reference: Outside Director Liability Across Countries (P140) Why Do Shareholder Derivative Suits Remain Rare in Continental Europe? (P150)
Section 1 General Introduction Corporate Law:Encourage investment and protect shareholder Agency:Shareholder v.s.Director -Enforcemet of Corporate Law:How to motivate the Director to act in the Shareholder's interest? Director:Legal Liabilty Shareholder:Shareholder Suits Agency Shareholder Director Principal Agent Page·3
Page 3 Section 1 General Introduction Corporate Law: Encourage investment and protect shareholder Agency: Shareholder v.s. Director Enforcemet of Corporate Law: How to motivate the Director to act in the Shareholder's interest? Director: Legal Liabilty Shareholder: Shareholder Suits Shareholder Principal Director Agent Agency
Section 2 Outside Director Liablity Director oInside Director D Directors who are also executives. Outside Director v.s.Independent Director Outside Director:Directors who are not excutives.(Non-Executive Director) Independent Director:Almost the same as Outsider Director,but not allowed to own shares of the company. Outside Director Liability oContent:Fiduciary Duty Consequence for Breach of Fiduciary Duty A lawsuit could oblige outside directors to pay damages or legal fees out of their own pocket. Aim:To make outside directors work hard and pay attention Page·4
Page 4 Section 2 Outside Director Liablity Director Inside Director Directors who are also executives. Outside Director v.s. Independent Director Outside Director: Directors who are not excutives.(Non-Executive Director) Independent Director: Almost the same as Outsider Director, but not allowed to own shares of the company. Outside Director Liability Content: Fiduciary Duty Consequence for Breach of Fiduciary Duty A lawsuit could oblige outside directors to pay damages or legal fees out of their own pocket. Aim: To make outside directors work hard and pay attention
Empirical Study on Outside Director Liability Scope of Research Country Feature U.K. The role of outside director is highly debated. 1.To explore how director liablities in a civil law country Germany 2.To assess the impact of formalizing the role of outside directors through a two-tier board structure Australia Common law jurisdiction Canada France Cicil law jurisdiction Japan South Korea Emerging market country Page5
Page 5 Empirical Study on Outside Director Liability Scope of Research Country Feature U.K. The role of outside director is highly debated. Germany 1. To explore how director liablities in a civil law country 2. To assess the impact of formalizing the role of outside directors through a two-tier board structure Australia Canada Common law jurisdiction France Japan Cicil law jurisdiction South Korea Emerging market country