Legal Consideration About Improving The Internal Supervision Mechanism Of Listed Company In China

The characteristic, which is the separation of ownership and management rights in modern corporations prevents the property owner of the company's control of the company's operations, improves the company's decision-making efficiency and reduces the company's decision-making costs. However, it also leads to the inconsistency of the sharing of property rights, that is, the Board has decision-making power, but the general meeting of shareholders bears the consequences of decisions, which makes it possible to abuse the power of board of directors, but listed companies dominate the economy because of its rich economic resources and important economic status. Compared with other companies, the abuse of power by board would be much harmful to the society, which makes the internal supervision of listed companies be required. The problem about internal supervision of listed companies in China is quite prominent, specifically expressed in:unreasonable ownership structure, "Big Stock" of the state-owned shares; the lack of protection in Board of Supervisors; the enhancement of the status of independent directors. The defects of internal supervision mechanisms make the phenomenon that always damages the controlling shareholder by abuse of power companies and shareholders happen frequently, therefore, it is necessary to improve the internal supervision mechanisms of listed companies.The countries of the world all attach great importance to the internal supervision of listed companies and establish related regulations in accordance with their respective national conditions. The most representatives consist of a single board of supervisors by the German model, a single independent director system in the United States, and a single independent director system and choice of a model system in two co-exist in Japan. The listed companies in China implement the monitoring mechanisms of supervisory system and independent director system coexisting.Analyzing the foreign sucessful practice in this area and combining with physical truth in China, this thesis thinks the problem of internal supervision mechanisms doesn't lie in the wrong existing regulatory structure, but not making full use of advantages of this system and also not making more specific and targeted provisions in the existing system according to the current situation in China. Accordingly, it is necessary to fully exert the respective system advantage of supervisory system and independent director system, mainly from the independence of the supervisor, working conditions, the enhancement of specific authority and improvement about limitations of incentive system, as well as coordinate the relationship between two systems in order to improve the internal supervision system of listed companies in China.