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Article

Trends and Development of the Directors’ Duty of Loyalty in China: A Case Analysis

by 1,2,* and 3,4
1
Centre for Jurisprudence Research, School of Law, Jilin University, Changchun 130012, China
2
Institute of International Shipping and Trade Law, Swansea University, Swansea SA2 8PP, UK
3
Centre of Corporate and Insolvency Law, Nottingham Law School, Nottingham Trent University, Nottingham NG1 4FQ, UK
4
School of Law, Guangdong University of Finance & Economics, Guangzhou 510320, China
*
Author to whom correspondence should be addressed.
Academic Editor: Benedict Sheehy
Sustainability 2021, 13(15), 8589; https://doi.org/10.3390/su13158589
Received: 13 June 2021 / Revised: 22 July 2021 / Accepted: 26 July 2021 / Published: 1 August 2021
(This article belongs to the Special Issue Sustainable Business, Corporate Social Responsibility and Law)
Covering a central theme in corporate law development, this paper discusses the pragmatic utility of the common-law-originated duty of loyalty of company directors in the civil law context of China. The reception of legal transplantation in a host environment remains a contentious theme, and it seems to be an opportune time to study relevant cases that have been adjudicated since China’s statutory inauguration of the directors’ duty of loyalty in 2005, in the sense that more than 10 years of practice has resulted in ample evidence on the practical effects of this transplanted duty. Through an analysis of 526 cases on the basis of eight attributes, we discovered some commendable features, including increasing accessibility of the law and a differentiation of various types of directors’ duties of loyalty. Meanwhile, the selective adoption norm customary to Chinese culture has to a certain extent compromised the intended goals of greater legislative clarity, judicial consistency and in turn balanced and sustainable businesses, demonstrated in several incompatibilities between transplanted duties and domestic legal institutions. Reshaping the conventional transplantation ideal that commercial laws are easily transferable, the paper suggests the construction of a broad collateral regime for greater congruence between laws and existing institutions. View Full-Text
Keywords: company law; directors’ duties; legal transplantation; duty of loyalty; sustainable development of businesses company law; directors’ duties; legal transplantation; duty of loyalty; sustainable development of businesses
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MDPI and ACS Style

Wen, S.; Zhao, J. Trends and Development of the Directors’ Duty of Loyalty in China: A Case Analysis. Sustainability 2021, 13, 8589. https://doi.org/10.3390/su13158589

AMA Style

Wen S, Zhao J. Trends and Development of the Directors’ Duty of Loyalty in China: A Case Analysis. Sustainability. 2021; 13(15):8589. https://doi.org/10.3390/su13158589

Chicago/Turabian Style

Wen, Shuangge, and Jingchen Zhao. 2021. "Trends and Development of the Directors’ Duty of Loyalty in China: A Case Analysis" Sustainability 13, no. 15: 8589. https://doi.org/10.3390/su13158589

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