Study Of The Company's Internal Control Mechanisms

In the recent dozens of years in the development of corporation system, the shares become more and more publicized and socialized, meanwhile the power of management expanded much and the management has actually controlled the managing power of corporations. So how to monitor them became the focus of investors, the public, the government and legal field.Internal control is very popular in China's listed companies, and it mostly caused by the invalid of corporate internal monitoring mechanism that is to say the failure to playing function sufficiently of inspector board. As the special monitoring organ, the inspector board should monitor the management effectual. Because of the faultiness of the regular of the law, it failed to do fill its role. In order to standardize the corporate internal monitoring mechanism, the independent director mechanism of common law legal family was been introduced to our country in recent years. The internal monitoring mechanism of corporations in China belongs to Double-Level type of civil law legal family, and the independent director belongs to Single-Level type of common law legal family, so there's problem of how to harmonize the two mechanisms. So because of failure to combine it to our country's facts, the practical effects or the independent director mechanism is not very good. There are many conflicts between the independent director mechanism and the inspector board mechanism, such as station and function. Which internal monitoring mode should we choose?This article based on the analyses of other countries' internal corporate monitoring mode and gives some advice to the corporate monitoring mechanism in our county in order to solve its limitations and problems.There are three sections in the article. The first section of this article introduces and analyses the characteristic, content, background of its producing of the three mode of corporate internal monitoring in other countries. And by comparing them we want to give some reference to our country's choice of which mode. The second part analyses the problems of China's corporate internal monitoring mechanism, i.e. discusses the problems in law and running of the director board monitoring and theinspector board monitoring. The inspector board failed to effect its monitoring purpose because of the limitation of personnel composing, appointment and removing and authority. And it collides with independent director mechanism after it was introduced into our country.In the third part, based on the aforementioned two parts and according to our country's facts some advises to given to perfect the corporate internal monitoring mechanism in our country. The unique internal monitoring mechanism in our country should be the combination of independent director mechanism and inspector board mechanism. We should take actions to perfect the independent director mechanism and the inspector board mechanism in order to harmonize them and to monitor effective.