Study Of The Independence Of The Supervisory Board

In recent years, the government and the society paid great attention to the restructuring of enterprises, especially that of state-owned enterprises; at the same time, it is the hot topic for the educational circles of economy and law to research that how to improve China corporations' governance mechanism, set up modern enterprise system and succeed to enterprise restructuring.Due to the separation of the ownership and the right of operation, in modern companies the shareholders do not directly operate or control the company. It is the board of directors that possesses the right of operation, and its behaviors bring an important effect on the legitimate interests of the shareholders and the company itself. In order to protect the interests of the shareholders and the company, nearly every country establishes supervisor system in their company laws. There are two modes altogether. One is the unitary mode which does not have an institution of supervision. The other is the binary mode which sets the board of supervisors as a special institution of supervision. Chinese company law inherts the tradition of continental law and consequently adopts the binary mode.However, in reality, boards of supervisors in Chinese companies have a lot of problems because of the ideological concept, the economic system and the design of the system, etc. The board of supervisors does not play a proper role in supervising and therefore even makes it useless. To solve the problems, this paper analyses the status quo and cause of formation of board of supervisors in China on the basis of comparing several typical internal supervision systems in foreign company laws, and makes some reasonable legislative suggestions for perfecting China's board of supervisors system. In discussion, this paper adopts various...