An Empirical Study Of Supervisory Board System For Listed Companies In China

The essence of the corporate governance structure is the relationship of check and balance of interests and risks between relevant stakeholders,the rational allocation of authority and responsibility while the effective internal supervision and the binding mechanism are established.The supervisory board system of listed companies in China is not only an important part of the internal supervisory mechanism but also the key factor by which the company is effectively governed.But the supervisory board for some of listed companies in China as the main supervisory organization has,all the time,become a weaker link of the corporate governance chain since the supervisory authority inside the company passes into others' hands.So the effectiveness of the Chinese present supervisory board system is brought doubts by the theory and the practice circle in addition to the Independent Director system transplanted which has prevailed recent years in Anglo-American law system and the practical experience of the internal supervision mechanism coming from Germany,Japan and some others which is used for reference.The doubts can still often be heard even if the supervisory board system in Chinese corporation law has experienced relevant revision and improvement.And the improvement of the corporate internal supervision is the key to enhance the governance quality and lower the governance risks.Therefore the supervisory board system of the Chinese listed companies will be faced with the serious test whether the effectiveness of the company's governance will be improved or not.This article will deal with the operational state of the listed companies'supervisory board system.We will find the basic reason why it is difficult to implement the supervisory board system of listed companies through multiple dimensions study and analysis of the law and rules of the system.And we will explore the feasible route to improve and complete the supervisory board system in order to build the internal supervision mechanism suitable for the need of the listed companies' internal governance,which will be done on the basis of full reference of the practical experience of foreign countries' supervisory board system in combination with the capital market developmental situation,ownership structure of listed companies and the supervisory effect of the corporate governance at the present stage.Apart from the introduction and conclusion,the article is divided into four chapters(4 parts),the content of which will be elaborated in it.The queries of the effectiveness for listed companies' supervisory board system will,by means of typical cases,be proved in chapter 1 which are existing in the theory and practice circle.The empirical study will,therefrom,be unfolded for the operational status quo of the system.We will select component stock corporations of Shanghai Stock 50 index as the sample for this empirical study(300 person-times supervisors altogether).We will make a focused study of three items,professional,effectiveness and independence of listed companies'supervisors through CSMAR.It will be done through manual screening the companies' annual report as the mode of disclosing information,and with the help of Excel in carrying out the data statistics and analysis the diagram will be drawn in the end so as to present intuitively the conclusion of this empirical study.The problems of reality and their basic reason will,in chapter 2,be analyzed which listed companies' supervisory board system is faced with.Through the above-mentioned empirical study and analysis of law and standardized system for listed companies' supervisory board system it will be known that the main problems which the supervisory board is faced with are as follows:weaker ability of performing functions,confused relation of interests,deficient in operational mechanism and the relevant law and standardized system urgent to be improved.The basic reason behind it lies in the fact that the ownership structure has a highlighted characteristic,say "the single-large shareholder",obstructed information source and the deficiency existing in other supervisory board system itself.The internal supervisory mechanism of main foreign countries is,in chapter three,presented and analyzed comparatively.The supervisory mechanism of the independent director type represented by the US,the supervision mechanism of the supervisory board type represented by Germany and the supervisory mechanism of selection type represented by Japan are elaborated by means of generation and evolution of the internal supervisory mechanism and feature of the main systems while forming mechanism of different internal supervisory mechanism is analyzed contractively in order to reveal the general trend of such items,as the corporate governance mode between different countries,system design,perfection and improvement of the internal supervisory mechanism.These items will have mutual penetrations and mixing together with examples taken.We will,in chapter 4,put forward the perfect route of listed companies'supervisory board system.It will be done by means of perfecting the law and standardized system,optimizing the organization structure of the supervisoryboard,building a sound safeguard mechanism for operation of the supervisory board system and clear-cutting the supervisory function and power and legal liability in order to improve the supervisory effect while it is stressed to build theganged cooperative mechanism so as to realize the required value of the supervisory board system.