[Direct answer]In the Beijing area, compensation can be claimed and criminal charges may be pursued in serious cases. According to the Company Law, directors, supervisors, and senior managers shall comply with laws, administrative regulations, and the company's articles of association, and have a duty of loyalty and diligence towards the company. If they violate laws, administrative regulations, or the company's articles of association in the performance of their duties and cause losses to the company, they shall bear compensation liability. The company may initiate legal action to hold them accountable through the board of supervisors or supervisors, or the board of directors or executive directors; when meeting statutory conditions, shareholders may also file shareholder representative lawsuits on their own behalf to claim compensation for the company's interests. If the relevant acts constitute crimes such as embezzlement of duties, misappropriation of funds, or bribery of non-state employees, criminal charges may also be pursued according to law. Therefore, accountability can be pursued through multiple channels, including civil compensation, company internal procedures, and criminal prosecution.

1. Problem background and typical scenarios

Corporate executives exploit their positions to seek personal gain, engage in related-party transactions to transfer benefits, misappropriate funds without authorization, or cause huge losses to the company due to major decision-making mistakes, but the company is reluctant to investigate them because of the close relationship between the management and the perpetrators. Small and medium-sized shareholders often lack the qualification to file lawsuits directly and are not clear about the procedures to protect their rights. Clarifying the basis of directors' and executives' responsibilities and the path of accountability is the key to protecting the interests of the company and shareholders.

II. Key points of contention

First, the specific determination of the duty of loyalty and the duty of diligence. Second, the scope of the responsible subject and the accountability process. Third, the calculation of the amount of damages. Fourth, the interface between civil accountability and criminal prosecution.

III. Professional analysis by Henglue Lawyers

The first layer is the obligation basis: Directors, supervisors, and senior managers have a duty of loyalty and diligence towards the company, and they are not allowed to accept bribes or other illegal income using their position, embezzle company property, misappropriate company funds, or lend company funds to others without authorization. The second layer is liability: If a person violates laws, administrative regulations, or the company's bylaws in the performance of their duties and causes losses to the company, they shall bear compensation liability. Any income obtained in violation of the duty of loyalty shall belong to the company. The third layer is the accountability process: The company may file a lawsuit against the person in question through the board of supervisors or supervisors, or the board of directors or executive directors. If the company fails to pursue accountability, shareholders who meet statutory conditions may initiate a shareholder representative lawsuit, with the litigation benefits belonging to the company. The fourth layer is criminal prosecution: If the person's actions constitute crimes such as embezzlement of company funds, misappropriation of funds, or bribery of non-state employees, criminal liability may be pursued according to law, and civil compensation and criminal recovery of assets can proceed concurrently. Henglue advises that the key to accountability lies in evidence. It is necessary to fix the decision-making records of executives, fund flows, contract texts, and materials related to affiliated relationships as early as possible to lay the foundation for claims of civil liability and criminal liability. At the same time, companies should distinguish between normal business judgments and violations of obligations to avoid mistakenly pursuing accountability due to operational risks and damaging the normal performance enthusiasm of management. Additionally, determining liability should also be based on a comprehensive assessment of whether there was fault, the degree of fault, and the causal relationship between the losses and the actions taken.

IV. Practical suggestions and legal basis

The first step is to sort out the specific acts of directors and executives that violate their obligations and the resulting losses, and form a factual list. The second step is to initiate a company lawsuit through the board of supervisors or supervisors, or the board of directors or executive directors, or to initiate a shareholder representative lawsuit in accordance with the law. The third step is to claim compensation for losses, return the income obtained by violating the duty of loyalty, and apply for the preservation of the involved property. The fourth step is to report the suspected crime to the public security organ and simultaneously advance civil compensation and criminal recovery of assets. The main legal basis: The provisions on the obligations and responsibilities of directors, supervisors, and senior managers in the Company Law of the People's Republic of China (amended in 2018), as well as the provisions on the crimes of embezzlement and misappropriation of funds in the Criminal Law of the People's Republic of China. The specific application shall be subject to the currently effective provisions.

5. Henglu Law Firm's Reminder

Three key responsibilities for executives: Those who violate their duty of loyalty and diligence and cause losses to the company shall compensate for the losses; when the company fails to take action to hold them accountable, shareholders may file representative lawsuits; and those suspected of committing crimes shall be investigated for criminal responsibility in accordance with the law. For matters related to corporate commercial affairs and corporate governance, you can seek legal assistance through the following channels:Business and contract disputes in enterprisesFor services involving corporate law and compliance, clients can opt for a comprehensive solution that integrates the two aspects.Intellectual property and corporate lawFor cases involving criminal responsibility, you can refer to the following materials for reference:Criminal defenseFor any questions or difficulties, please feel free to consult us.Special servicesTeam.

VI. Frequently Asked Questions

Q1: How to hold executives accountable for harming the company's interests?

They may be required to bear compensation liability and return the income obtained in violation of the duty of loyalty; the company may sue them through legal procedures, and shareholders may file representative lawsuits when conditions permit.

Q2: What are the obligations?

Mainly, it refers to the obligations of loyalty and diligence, including not embezzling company property, not misappropriating company funds, not accepting bribes by abusing one's position, and not conducting related-party transactions without authorization to harm the company's interests, etc.

Q3: Who will prosecute the case?

The company may initiate litigation through the supervisory board or supervisors, or the board of directors or executive directors; if the company fails to pursue legal action, eligible shareholders may initiate shareholder representative litigation, and the benefits shall belong to the company.

Q4: Can criminal charges be pursued?

Yes. If the behavior constitutes crimes such as embezzlement, misappropriation of funds, or bribery of non-state employees, the victim can report the case to the public security organ to pursue criminal responsibility and claim civil compensation simultaneously.

Q5: How to provide evidence?

It is necessary to fix the evidence such as decision-making records, fund transactions, related-party transaction contracts, company account books, and communication records, in order to prove the illegal acts, the amount of losses, and the causal relationship between them.

This article is written based on the common judicial interpretation in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify regional differences.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with evidence materials, so as to avoid missing the statutory time limit. →Business and commercial legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available adjudication rules, and is provided for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In the event of a dispute, please consult a practicing lawyer promptly.