The Study Of Director Nomination System

Although the meeting of shareholders is the company’s highest authority in China company law, for listed companies, in terms of the amount of shareholders, it’s unable to make a decision upon the company’s daily operations through the extraordinary shareholders meeting or the annual general meeting of shareholders. The shareholders meeting usually only vote for the major issues stipulated by company law and the articles of association. In order to maintain efficient decision-making and management, the board of directors gradually have the decision-making power in the daily operation of a variety of matters. Therefore, the composition of the board of directors and electing directors of the company become very important for the company as well as shareholders. In terms of listed companies, the election refers to the efficiency of corporate decision-making body, further more, refers to the effectiveness of corporate governance. For the majority of shareholders of listed companies, the election of directors, particularly independent directors’ election, in relation to their vital interests.Directors nomination system in premise of the directors election system, is a part of the board of directors and corporate governance system. Director nomination system to some extent affects the results of Directors elected, as well as the structure of the board, even the configuration and status of checks and balances of power in company. According to Company Law of The People’s Republic of China, shareholders explicitly have the right to elect directors, but how to nominate candidates is very ambiguous. If regarding director nomination system as a useful support improvement of corporate governance, the revision and supplementary of the current company law is necessary. This paper proposes many problems in relation of director nomination system firstly, and then analyzes the two aspects of the nomination of directors, subject and procedures. At last, the paper discusses legal norms path of the legal system.The first chapter proposes problems of director nomination system. First of all, combed and conclude summed up the first sort of the current legal provisions of the nomination of directors and related articles, analyzes the existing problems of the statutes. Secondly, the paper cites two controversial issues occurred in the current realities director nomination process, pointing out flaws in our legal system lead to difficulties in practice. Finally, based on the presence of induction legislation and practice on the current problems of director nomination system summarizes the problem is the content director nomination system is imperfect, and the differential path of legal norms, the need for specific comprehensive design director nominations from the main content and application content and clear legal norms on the way this system.The second chapter is about the subject of director nomination system, that is who can participate in the nomination of directors. Unlike the United States and other countries’ election of the directors, through the company proxy materials, without shareholders’ meetings, the decision of election in China must be made by the general meeting of shareholders. Therefore the subject of our directors nomination needs to consider the subject who has the right to make proposals. The paper, from the theoretical basis of Company Law, discusses three different subject whether can participate in the nomination of directors, and analyzes their respective roles in director nomination system. Overall, the Nominating Committee to nominate directors shall be a conventional manner, and when shareholders meet some certain conditions they also can propose candidates of directors directly, the Board of Supervisors as Supervisory Authority has no rights to nominate directors.The third part refers to the program of director nomination. There will be two different procedures for the Nominating Committee and the certain shareholders. Detailing the entire procedures of Nominating Committee, including the disclosure requirements throughout the entire procedures. At the same time, the paper tries to design the process of shareholders to nominate directors, and to connect to the procedures of Nominating Committee to nominate directors.The fourth part discusses the legal norms of director nomination system, namely whether the election of directors must be forced by law and which content of the system should be mandatory. By comparing the provisions of the United States, Japan and Chinese Taiwan, the paper summarizes the specifications they belong to above problems, from the perspective of legal logic, clearly for listed companies, directors nomination system should be mandatory, and the subject and procedures also mandatory principled.