On Defects And Improvement Of Shareholders’ Proposal Right System

Shareholders’ Proposal Right system is one of important parts in CorporationLaw, concerning the exercise of proposal right. It acts a significant role in safeguardof the rights and interests of minority shareholders, improvement of the corporategovernance structure, and promotion of the democracy and the implementation of thecorporate social responsibility as well.Shareholders’ proposal right is just the proper connotation of Shareholder’sRights, the inevitable requirement of the equality principle of shareholder, and what’smore, the means to guarantee company’s separate existence. Shareholder ProposalRight system is with rich content, and related to the qualifications, the scope andcontent of proposal, the form and procedures of proposal, and proposal right relief, etc.Proposal right exercising is required to follow the principle of good faith, legality andpurposiveness without abusing of rights.Shareholders’ Proposal Right system was established along with the amendmentof Corporation Law in2005, exerting a positive function ever since in practice.However, due to various reasons, there are defects in the qualification of proposers,the scope of the proposal content, the proposal exercise program, the reviewmechanism and the proposal rights relief and other aspects of the proposal, whichneed to be further improved. Many countries have established more scientific,improved shareholder proposal rights regulatory system, and there is worthwhileinformation for us to refer to. It does not mean copying, but that specific conditions,such as differences in the practice of foreign company legislation and that in ourcountry, must be considered.Nowadays, the development of extraterritorial Shareholder Proposal Rightspresents new trends as following: qualifications of proposer gradually can be accessedeasily; reasons for excluded proposal are declining; content of the proposalincreasingly focuses on corporate social responsibility; institutional investors becomethe main sponsors. It is obvious that it has become a good way for shareholders totake participation in corporate governance.Therefore, there are some crucial things for us to improve shareholder proposalrghts: further researching on the general theory and legal requirements of it,appropriately grasping China’s national conditions and the trend of related oversea reforming, actively learning from foreign advanced legislative experience, adhering tolegislative concept of protecting enforcement of rights and preventing the abuse ofrights, improving the main qualification of shareholders, expanding the range ofcontent of shareholder proposal, improving the implementation procedures ofshareholder proposal rights, building a reasonable bill censorship and right reliefsystem of shareholder proposal rights.