Corporation Board Of Supervisors Reorganization Of The System

The supervision institution, a vital component of corporate governance, is an internal systemof stock companies specialized in supervising. In our country, board of supervisors system is a necessity of corporate supervision of stockcompanies. However, independent director system originated from Anglo-American-Law systemis also introduced in.From its practice in China, the independent director system is exposed to mountains ofproblems, and just couldn't fit in the situation here, disappointing most of the people who favoredit.The existence of two different supervision systems fails to solve the supervision problem ofstock companies in China. Further more, these two systems sometimes overlap and conflict witheach other, increasing the transaction and agency costs of the company.Which supervision system to choose depends on a variety of factors, including economicenvironment, law system, cultural heritage and historical influence etc.However, during the process of the implication of the P.R.C Company Law and therebuilding of traditional enterprises, the board of supervisors system didn't exert sufficient impactand might even was implemented effectively only at the surface. It is mainly because of theinfluence of outdated conception, institution and law system. The deficiency of the board ofsupervisors system couldn't meet the requirement of the development of Socialist MarketEconomy and the establishment of Modern Corporation Institution. So it is very important toperfect the law of the board of supervisors system through legislation, and accelerate therevolution of philosophy and institution in China. In return, the change of philosophy andinstitution could further lead to the enhancement and advancement of legislation. By this meanscould the development of our Socialist Market Economy be persistent, consistent and healthy on asound base.