Introduction Of Corporate Supervisors And Perfecting The System Of Supervision Committee In China

"Although there are different interpretations on the spirit of corporation governance, the core of the corporation governance structure is the corporation's management and supervision mechanisms."If mechanisms can play an effective role is directly related to the interests of shareholders and creditors, and is an important guarantee for corporation's health and stable operation. People have been trying various methods to achieve balance between management costs and regulation effect. History proved that the system of supervision committee is able to effectively control governance costs, and is the most effective means of supervision on the corporation's operation.This article is divided into three parts: introduction, body, conclusion. In the introduction, there is a brief analysis of current situation and improvement on the system of supervision committee, which leads to the problem to be solved in this paper.This text is divided into three parts, through Analysising the legal systems on supervision committee in China, to find out the crux of supervision committee. Utilizing advanced foreign legislative experience, there are some advices about perfecting the system of supervision committee in China.The first chapter briefly introduces the basic situation of the system of supervision committee in China, analyzes of detailed defects of the internal supervision mechanisms. Our supervision committee should be built up modeling the Japanese, although once being abolished, but being re-established and growing after "The Law of Corporation". With several major changes on "Company Law", the power of supervision committee is also expanding and perfecting. But now, the actual effect is that the system of supervision committee is not well. Here are adverse factors, for example, in transition to market economy and the imperfect market system in China, but more important is there are legal deficiencies of the system of supervision committee. First of all, lack of independence. As the relative concentration of equity, internal control is serious, major shareholders rely on equity advantages to control indirectly or influence supervision committee. Lacking of necessary safeguards, employee supervision which is set by the law can not play a supervisory role. Second, authority is still limited. There is no specific right of financial inspection of supervision committee under the law, lacking of maneuverability. Supervisors are not entitled to exercise supervisory functions, which restricts supervision committee to perform their duties. In addition, supervision committee lacks of power of participating in corporation meetings and overseeing the company's decision-making. Losing powers make it have too many difficulties to cope with supervision .Again, the supervision committee members lack the necessary legal and financial knowledge, because the law did not make positive rules on qualification of supervisors, thus laymen regulate experts, the problems can not be found in time, the supervision is very inefficiency. Finally, the law on supervision committee is also not clear about supervision responsibility, lacking of reward and punishment mechanism to can not urge supervision committee to perform their duties, not be able to improve the supervision power. Through the analysis of the system of supervision committee, we found the legal entry to perfect it, through legislation to make up for the independence of supervision system and the lacking of supervision professionalism, and the introduction of the system of corporation supervision committee selectively and recommendations on other relative supervision system in China.The second chapter introduces proposes the concept of perfecting the system of supervision committee as the core is introduction of corporate supervisors. This chapter is divided into two parts. The first part is the analysis of the possibility of legal persons being supervisors. First, the argument that if legal persons can serve as supervisor. Though the legal persons is a collection of natural persons, the views through its internal unity, external representation, can perform supervisory duties as natural supervisors. Compared with the natural supervisors, as legal persons generally have their own statutes or work norms, their behaviors is less susceptible to outside interference, more independence. At the same time , legal persons being supervisors, in particular, in accounting firms, law firms as legal persons, the importance of its own credibility far more than ordinary natural persons;. In the field of professional regulation is can not be compared to the general supervisors .In short, legal persons being supervisors is not only feasible but also more conducive to improving regulatory quality.The second part of this chapter introduces the overall concept of corporate supervisors. Establishing legal supervisors systems should take Chinese current supervision committee `s defects to the main entry to ensure the independence of corporate supervisors and play a dominant center of corporate business experience. The scope of the corporate supervisors, we can learn from Japanese experience in the relevant legislation, differ the number of shareholders from company size, make different rules on the application of corporate supervisors. Supervision committee must select corporate supervisors while the number of shareholders reach a certain standard, there are absolute controlling shareholders, or a larger company. In the qualifications, the supervisors and the company or the company's shareholders can not be an association to protect their independence. Supervisors should have the legal supervision of the business to adapt to their specific professional qualifications. Electing corporate supervisors, shall be cumulative voting, elections supervisor of financial supervision and a reasonable number of corporate accounting and other corporate supervisors. The purpose of the introduction of corporate supervisor is to strengthen the independence of the board of supervisors to improve the level of supervision. Thus, except general supervisors` supervision, corporate supervisors should be allowed to exercise supervision independently and we should strengthen the financial supervision and information achieving rights of corporate supervisors. In response to complex social environment and the behavior of the operators to circumvent the law, the law is necessary to conduct the legitimacy and rationality review. We should be made clear of supervision committee's coordination and guiding position,when dealing with the relation between corporate supervisors and supervision committee. From the professional point of view on maintaining independence on the corporate supervisors, respecting for corporate supervisors, to ensure that corporate supervisors be responsible for all shareholders, exercise supervisory authority independently, free from undue interference in the supervision committee. In addition, the law should perform their duties as corporate supervisors to provide the necessary legal protection, financial security, and clear legal duties on corporate supervisors.The third chapter, make recommendations on how to improve the related legal system about supervision committee, and improve the role of corporate supervisors external oversight environment. Improving the legal status of supervision committee, to give the supervision committee the right of appointing directors, officers, and supervising the personnel arrangements; improve the process of electing supervisors, select cumulative voting imperatively, and take into account the wishes of minority shareholders additionally; introduce external supervisors as a supplement of the system of supervision committee; optimize personnel structure of supervision committee.