Abstract: The legitimacy of imposing compliance management obligations on state-funded companies, financial institutions and other entities by laws and regulations lies in the particularity of such entities in terms of capital sources and public functions. The company is subject to compliance management obligations, which means that compliance management has been added to the content of directors’ duties to fulfil corporate functions, but does not mean that directors naturally have compliance management obligations towards the company. The meaning of compliance management has been solidified in the regulatory context of China as the activity of managing the company’s compliance matters through the compliance management system. Under their duty of care towards the company, the directors should fulfill the duty of supervision over the law-abiding act of the lower- and middle-class employees of the company. The duty of supervision is derived from the directors’ duty of care to the company and is secondary to the duty of care. Except for the special types of companies that are subject to compliance management obligations, whether the directors should fulfill their duty of supervision through compliance management, that is, through the establishment of a compliance management system, depends on the specific circumstances of the company. And it is the directors’ business judgment whether compliance management system and what kind of compliance management system is to establish. In addition, the court should maintain modest in its judgment on the content of the compliance management system, except in cases where the content of the compliance management system is considered to have obvious defects from the perspective of common sense.