On The Supervisory System In Corporate Governance Of Family Business

Family Business is the most common forms of enterprises in world, theimportance of family enterprises in China is noticed by more and more peoplebecause of its rapid development and tremendous contribution to our nationaleconomy growing. How to improve the performance of family business became themain concerns of many people, the broad consensus of this question is improvingcorporate governance structure of family business. For based on the special ownershipstructure of family business, there is a distinguishing feature in its corporategovernance which is taking relational governance mostly and contract governance less.And family business in China because of the country’s historical, social and culturalfactors, the feature is behaved more seriously. But this pattern of corporategovernance, often brings many problems in reality, such as the lacking of supervisionand balance of power, the chaotic management caused by unclear rights andresponsibilities, the weak human resources and financing, which seriously hamperingthe improvement of these enterprises’ performance, dampening their developmentpotential. This paper is based on the analysis of our family business’ feature incorporate governance and supervisory system, by way of recommendations forperfecting the existing supervisory system in our country, to provide some ideas forimproving our Family business’ corporate governance and overcoming its’shortcomings.The article except the forward and conclusion, is divided into four parts:The first part: From the beginning of the article, the concept of family businessand corporate governance is introduced and carefully defined. Then, the author carriesout the analysis of the feature and defects of corporate governance in Chinese familybusiness, shows the problem to solve in this article.The second part introduces the concept and theoretical perspectives ofsupervisory system, then comments on some kinds of typical supervisory system offoreign countries to provide some precedents for the improvement of supervisorysystem in our country.The third part: At first introduces the legislative status quo of supervisory system in our country. Then analyzes the problems and causes revealed in implementation ofour current supervisory system in family business, to bring our study into focus.The fourth part: Puts forward the legislative suggestions for the Chinese currentsupervisory system, such as establishing the independent supervisor system andreinforcing the supervisors’ authorities.