Research On The System Of Corporate Supervisory Board

In modern company, the owners of the company are separated from the management of the company. The shareholders do not manage or control their company directly. It is the board of directors, whose behavior has direct and important influence over the legal rights and interests of shareholders and the company, that exercises the power to run the company. To protect shareholder and company, a kind of supervisor mechanism is devised in almost every country, in which China as well as the major countries of Continent Legal System establishes a special supervisory organization ——supervisory board. However, in actual life, because of the influence of the factors such as ideological idea, economic system and system design, China's system of supervisory board has many problems, one of which is that the supervisory board has never played promised supervisor role in company administration. To solve those above-mentioned problems, the author made an in-depth review of the typical supervisor systems of several foreign countries, and suggest for perfecting our country's system of supervisory board. Through the article, the author has adopted various research methods, including historical analytic method and comparable analytic method. Besides the forward and the conclusion, the article is divided into four Chapters: The first Chapter: From the very beginning of the article, the concept of the system of supervisory board is introduced and carefully defined. Then, the author carried out the analysis of the system of supervisory board from four theoretical perspectives, namely the theory of balances and checks, the principle of self-help in the private law, the cost of agency theory and the theory of balancing the conflicting interests. The second Chapter: This part of the article introduces some kinds of typical supervisory system of foreign countries. Specifically, that is the independent director system of the US, the system of supervisory board of Germany and internal supervise organization of Japan. The author comments on those systems shortly after the introduction. The third Chapter: First, the author presented the choice China has made in the enactment of the company's internal supervision organization, and points out that both the supervisory board and the independent director are provided in modern China legal system, while the supervision board is the main supervisory organization of the company. Then the author finds out why China's system of supervisory board does not function well in practice. These factors include the ideas of the persons and the loopholes of the system. All these discussions in this part pave the way for the proposals introduced in the coming chapter. The fourth Chapter: It is the key part of the article. From the aspects of the personnel system of supervisory board, authorities exercised by the supervision board, as well as the restraint mechanism, the author put forward the legislative suggestions for the reform of China's supervisory board system.