The Legal Issues About The Supervisory Authority Of The Supervisory Board In The Listed Companies

The core function of corporate governance is supervision and counterbalance. Inthe legislation of company, this function of supervision and counterbalance is chargedby different forms and organization. For example, common law system relies on theindependent director system, and the civil law countries such as Germany and Japan,depend on the system of board of supervisors, while China creatively adopted thedual supervision system "board of supervisors and independent director" in theprocess of company system reform. Accordingly, the board of supervisors has becomeone of the "new three cores" in the governance of listed companies in China. Incontemporary, when the Company’s Supervisory Board, in particular a listedcompany, exercises the power, it will encounter a series of difficulties. Thisdissertation will firstly clear the definition, value and characteristics of rights of thesupervisory board. Then it will summarize the issues that the board of supervisors inlisted companies exercise its rights, and analysis its causes, and supply solutioncountermeasures.This article is divided into four chapters. The first chapter is a generalintroduction about the supervisory board. It will start from the concept of the right ofthe Board of Supervisors in the listed companies, clarify its meaning, and thenanalyzes the value of the Board of Supervisors in balancing corporate governancestructure, improving the efficiency of internal oversight and the protection of thevalues embodied by the shareholders and other relevant people. In addition, thischapter also summarizes a variety of features of the supervisory authority of theBoard of Supervisors in the listed companies, including legal, authority, democraticcharacteristics, certainty and flexibility.The second chapter of this article is targeted on the subject of the authority of thesupervisory board in the listed companies in our country. On one hand, supervisorsdiligence obligations need reach the designated level，and on the other hand，thecomposition of the board of supervisors should come to a diversification. Now, thecompany law in our country is short for the supervisor interest coordination mechanism. Specification of the requirements of the supervisory board,as well as thesupervisors, can fix the problem.The third chapter focuses on the strengthening of the supervisory power of thesupervisory board. Now, the board of supervisors to supervise the boundary is unclear,both in the financial supervision and the business supervision. In terms of financialsupervision, financial information is the basis of financial supervision, improving thelevel of supervisors’ accounting professional knowledge, and clarifying the board ofaccounting controlling between supervisors and the board of directors are theeffective ways. And the business supervision is consist of supervision in advance andsupervision afterwards In addition, independent supervision of the supervisor caneffectively strengthen the effectiveness of the supervisory board.The fourth chapter is to improve the countermeasures of operational mechanismof the supervisory authority in China. Now supervisor diligence obligations do notreach the designated level, because the incentive and constraint mechanism of thesupervisory board is insufficient. The solutions include: perfecting the incentivemechanism and strengthening obligation mechanism of supervisors. To strengthen thesupervisor responsibility for the company, as well as to the other Interest relatedpeople can effectively put an end to abuse of the supervision. The innovation ofincentive mechanism, in other words, setting up an effective incentive system whichassociated with supervision, can improve the enthusiasm of supervisors to exercisesupervision.