On Two-Tier Supervision Model Of "Supervisory Board-Independent Directors" Of Listed Companies In China

Corporate governance is a focus for discussion in legal and economic field all over the world in these decades.The internal supervision institution of the listed company is an important aspect of corporate governance.The establishment of supervisory board or Independent Directors forms the difference between the common law countries and civil law countries on company internal supervision institutions.Chinese new Company Law provides that independent directors shall be established by listed company besides the establishment of Supervisory board.No precedence of this model in other countries exists ever before.This paper analyzes the two-tier supervision model of the listed company in China and provides some suggestions for the adjustment of the internal supervision institution mainly by methods of comparison,deduction and conclusion.The paper consists of the introduction,the body and the conclusion. The introduction part introduces the problem to be resolved in this paper by the analysis of legislation and theory research on company internal supervision institution.The body consists of the following four chapters:The first chapter is a general description of company internal supervision institution.From the concept of corporate governance,the author points out that corporate governance includes corporate internal governance,which can be analyzed from the points of stimulation and restriction.Internal supervision institution is a key point of the internal restriction institution.Internal supervision institution mainly includes supervisory board and independent directors.The paper introduces the independent director institution from the aspects of its concept,background, function and efficiency.And then the internal supervision institution of the listed company in China is introduced.By the comparison with the internal supervision institutions of the common law countries and other civil law countries,no legislation precedence on the two-tier supervision model provided by Chinese new Company law is found.The second chapter analyzes the value of the independent director institution under the ownership in China.On the basis of the general theory of the relationship between ownership and corporate internal supervision institution,the author analyzes this topic in China.The author educes that the phenomena of "single major shareholder" and "inside control" exist among listed company in China.Major shareholder may abuse its right to infringe upon the minor shareholders and the managers may also infringe upon the interests of the company.What's more,the abuse taken by the major shareholder always by the way of the resolutions of the director boards or managers' decisions.Thus,independent director institution, originated from America and widely used to supervise the managers,can exert its function in China.The third chapter focuses on oppugnation of the two-tier supervision model.From the points of the functions between independent director and supervisory board,the third chapter deems that the functions of the two institutions are similar.By comparison of the existing legislations,we find that the two institutions overlap each other in functions,and the functions can be amalgamated,what's more,the two-tier supervision structure will increase the cost of agent.In connection with the formation of the new Company Law and by the analysis of the nature of company law,the author concludes that the establishment of two-tier supervision model shall not be mandatory.The forth chapter analyzes the improvement and adjustment of the internal supervision institution of listed company in China.In short time, the functions of independent director and supervisory board shall be clearly clarified and resolution institutions shall be established to resolve the problem of conflicts between the two institutions.From long point of view, listed company shall be endowed with the right of choosing between independent director and supervisory board.Under this premise,the author proposes several suggestions for the perfection of the two institutions.The article makes a conclusion in the end.