6. Directors and Board of Directors

In the case of Beijing Yanjing Construction Engineering Co., Ltd. versus Yang Guoqing Regarding the Damages of Company Benefit, the Court held that a director shall abide by laws, administrative regulations and the articles of association of the company, and have a fiduciary obligation and obligation of diligence to the company (Article 147 CL). Where a director violates the provisions of laws, administrative regulations or the articles of association of the company in the execution of his duties, thereby causing losses to the company, he shall be liable for compensation (Article 149 CL). The defendant in this case, Yang Guoqing, the director of the company, failed to take effective and legal actions to solve the problems of the company business operation during his term of office, on the contrary, he took some inappropriate behaviors which lead to the company’s difficulties in business operation and cause the economic losses to the company. Therefore, the Court sentenced that the defendant shall bear the liability for compensation as the director of the company.