In the Gome incident, did Chen Xiao's board of directors violate the obligation of loyalty, diligence and prudence?

To answer this question, we must first find out to whom the board of directors performs the duty of loyalty, diligence and prudence, which is the major shareholder or all shareholders. The representative of the major shareholder on the board of directors is the executive director, and the representative of the minor shareholder on the board of directors is the independent director. From the perspective of corporate governance, this structure can basically ensure that the resolutions made by the board of directors take into account the interests of all parties and represent the demands of all shareholders.

The particularity of Gome case is that Chen Xiao is a director nominated by the major shareholder, but he has done something harmful to the interests of the major shareholder at the board meeting. Therefore, it can be said that Chen Xiao failed to fulfill his duty of loyalty, diligence and prudence to Gome's major shareholders. However, Chen Xiao's meticulous management and giving up scale for efficiency can really improve Gome's performance in a short time. From this perspective, the board of directors represented by Chen Xiao is qualified, and the decision made is in the interests of all shareholders of Gome.

On the development strategy of Gome, Chen Xiao and the major shareholder family have differences, and he only uses this difference to meet the short-term investment needs of financial investors such as Bain. Under the game of interests of all parties, Bain finally chose debt-to-equity swap, from financial investor to strategic investor, which is equivalent to standing on the side of major shareholders. Chen Xiao and Sun were finally abandoned, and they could only be left out in the cold.

In other words, Chen Xiao failed to fulfill his obligations to the major shareholders, but there was not much problem at the board level.