Law Research On Weakness Of China’Company Supervisory Board System

The fundamental cause of the ineffectiveness of Supervisory board system lies in the inadequate legislation. There is no need to doubt the rationality of the supervisory board system being part of the effective operation of the company, acting as supervisor and manager in the system of supervising and managing in modern companies. However, the current practice of supervisory board is not optimistic. Most supervisory functions do not work effectively on systematic perspective. Current supervisory board function and salary are lack of independence from systematic level while the expertise, the literacy and the ability of supervisors in the supervisory board system are generally low. At the meantime, there are no corresponding managing, encouraging and restraining means for supervisors. As a result, all these lead to the low lever of supervision of the company supervisory board system. Supervisory boardsystem, not keeping the company from risks in operating according to legal provisions, becomes specious and castle in the air. During the future reform of the supervisory board system, we should start with the structure of the supervisory board system, the expertise of supervisors, Right to Know of supervisors in the system and setting up effective incentive and restraint mechanism and so on, in order to ensure the status and function of supervisory board system in company supervising and managing and the rapid and efficient development of our national economy. This article selects30representative listed companies in Shanghai and Shenzhen Stock Market during2011-2013as samples. It analyzes problems in current supervisory boardpracticefrom solid evidence perspective and studies functioning condition and existing problems of company supervisory board to optimize the reform and provide improving suggestions. Data derives from annual reports provided by Shanghai and Shenzhen Stock Exchanges.