The Internal Oversight Mechanisms Of Listed Companies

The studying methods of this thesis includetrans-disciplinary method by putting the economics and managingknowledge into the legal study of the internal monitoringmechanisms of listed corporations. It also uses the method thataliens regulations analysis with its practice. This thesisstudies the practice and the legal regulations of the internalmonitoring mechanisms of listed corporations in China.A long-term development of listed corporations relies on goodcorporate governance including effective internal monitoringmechanisms. Firstly, this thesis analyzes the basic theory ofthe internal monitoring mechanisms of listed corporations, thengeneralizes some conclusions about the power structure of thecorporations,the supervisory systems and their characteristicsand decisive factors of America,German and Japan. On the abovebasis, this thesis tries to solve two theory problems forconstructing the internal monitoring mechanisms of listedcorporations in China: Firstly, which should the listedcorporations in China choose to use, the independent directorsystem or the supervisor board system? How to perfect it if itneeds? Secondly, is there any need in the co-use of these twosystems? Is it a better choice to allow the corporations tochoose either for use? In the study of these two problems, thisthesis puts forward its own ideas.Firstly, this thesis researches on the basic theory of theinternal monitoring mechanisms of listed corporations. Theinternal monitoring mechanism is a part of the monitoring mechanisms of listed corporations; it has two definitions thathave different ranges. The aim of the internal monitoringmechanism is dual. The internal monitoring mechanism is animportant part of corporate governance. As to the reasons andthe needs of the internal monitoring mechanisms, there are manydifferent ideals and theories.Secondly, there are three conclusions from the comparativestudies of the internal monitoring mechanisms of listedcorporations in America,German and Japan. First, some economicsfactors like the share structure and the investment methods,the legal and juridical systems,the political and culturefactors have influences on the formation and development of theinternal monitoring mechanisms of listed corporations. It is asystematic mechanism formed by two parts, an internal one andan external one. It needs a long time to develop and perfect.Second, some characteristics of the internal monitoringmechanisms of listed corporations like the establishment of thesupervisory institutions and the requirements of the people whooperate in them are common. Third, the supervisory power of theinternal monitoring mechanisms has been increased. Thecorporations put more importance on the common investors and theinstitution investors.Thirdly, for constructing the internal monitoring mechanismsof listed corporations in China, this thesis has a comparativestudy between the independent director system and the supervisorboard system. It is not a good idea to adopt the independentdirector system in China because of the differences in its birthbackground between China and America and its own shortcomings. The supervisor board system, especially the German one, is abetter choice because it can alleviate the power abuse of theholding shareholders and it has a more powerful supervisorysystem. It also has preferences on the arrangement of thesupervisors and their independence origins. The supervisorboard system is more available and flexible in China.Fourthly, after making choice of the internal mechanism, thisthesis gives some advice on the perfection of the supervisorboard system including the state and construction of thesupervisor board,the working mechanism and the qualificationsand the election, the authority of the supervisors. As to therelationships between the independent director system and thesupervisor board system, this thesis thinks that it is not a goodidea to put them together, either authorizing the corporationsto choose either of them.