Research On The Supervisors’ Individual Performance Of The Duties Of The Board Of Supervisors

The traditional way of the Board of Supervisors in China is collective resolution,and supervisors can’t exercise their rights alone.In fact,the majority shareholders hold the articles of association,the management right and supervision right of the company in their own hands,which makes the minority shareholders lose the possibility of participating in the management and supervision of the company,and the supervision function of the Board of Supervisors is weakened.In 1993,Japan introduced the Board of Supervisors system into large companies,which allowed the Board of Supervisors to exercise power collectively and the system of independent supervisors to coexist,improved the efficiency of supervision of the company’s supervisors,and formed a coordinated and orderly internal supervision system of the company.China can learn from the practice of Japanese company law,on the basis of adhering to the principle of collective resolution of the Board of Supervisors,allow the supervisors to perform the duties of the Board of Supervisors individually,so as to improve the system of the Board of Supervisors in China.This paper is divided into three parts:The first part: the reasons for the supervisors to perform the duties of the Board of Supervisors individually.Firstly,there are defects in the way of collective resolution of the Board of Supervisors,mainly in two aspects.On the one hand,the independence of the Board of Supervisors is weak.Major shareholders control the Board of Supervisors directly or indirectly,and the independence of the position of the Board of Supervisors is weak.The Board of Supervisors is composed of internal personnel of the company.The Company Law does not stipulate the specific proportion of employees’ supervisors and the active qualification required by supervisors,which weakens the independence of the members of the board of supervisors.The Board of Supervisors only has the right to recommend the removal of directors and senior managers.The right to convene the proposal of the interim shareholders’ meeting is not guaranteed.The way of discussion and voting procedures is decided by the articles of association of the company or even indirectly controlled by the major shareholders.The way of obtaining information is single.These results in that the independence of the Board of Supervisors is weak.The supervision funds of the Board of Supervisors are limited by the management,and the independence of the compensation of the members of the Board of Supervisors is weak.On the other hand,the operation efficiency of the Board of Supervisors is low.In China’s corporate governance,the Board of Supervisors should pursue the value orientation of efficiency firstly.In the actual operation process of the Board of Supervisors,due to the lack of specific operating rules of the Board of Supervisors meeting,the efficiency of the Board of Supervisors meeting system is low.There are no special office and staff of the Board of Supervisors,which leads to the low efficiency of the organization of the Board of Supervisors.The company law does not stipulate the duty of the Board of Supervisors to be lazy in performing their duties,and the efficiency of the evaluation mechanism of the Board of Supervisors is low.Secondly,reasonable system design can overcome the defect of the supervisor’s individual exercise.Although the individual exercise of supervisors may lead to the abuse of supervisory power by powerful supervisors,it is beneficial to prevent the abuse of individual supervisory power to clarify the preconditions of individual exercise of supervisors,limit the scope and mode of individual exercise of supervisors,endow the supervisees with certain right of dissent,and improve the responsibility system of supervisors.Only when it is impossible for the Board of Supervisors to make a resolution or in case of emergency,the supervisors can individually perform the duties of the Board of Supervisors.Thirdly,the individual exercise of supervisors will not break the current corporate governance structure.For the corporate governance of our country,the collective exercise of the Board of Supervisors and the individual exercise of supervisors are the relationship between principle and exception,both aiming to give full play to the supervisory function of the Board of Supervisors.Compared with the introduction of the independent supervisor system,the reform in the existing system of the Board of Supervisors and the coordination of the relationship between the collective exercise of the Board of Supervisors and the individual exercise of supervisors are more in line with the requirements of the company’s cost-benefit principle.The second part: the scope of supervisors’ individual performance of the duties of the Board of Supervisors.Compared with the financial supervision scope of collective exercise of the Board of Supervisors,the scope of financial supervision of individual exercise of supervisors is narrower.Supervisors individually can only carry out daily financial inspection on the company and internal investigation on the company’s business abnormality.The handling of important matters and external investigation on the business abnormality should still be carried out by the Board of Supervisors.The specific scope of financial supervision can learn from the practice of Japanese and German company law and the provisions of the normative documents adjusting the Board of Supervisors of special companies in China.Compared with the scope of business supervision of the collective exercise of power of the Board of Supervisors is mainly legality supervision and supplemented by appropriateness supervision,supervisors can only supervise the legality of the post behaviors of directors and senior managers,and should not involve the appropriateness supervision of the company’s operation and management behaviors.This is because the individual exercise of supervisors is an exception to the collective exercise principle of the Board of Supervisors and should be strictly restricted.The third part: the implementation of the duties of the board of supervisors.Firstly,the supervisors initiatively take to inspect and investigate the financial and operation of the company,and the directors and senior managers take the initiative to perform the obligation of notification.Secondly,supervisors have the right to deal with the illegal acts of relevant personnel.This behavior is based on the condition that the situation is urgent and the company may suffer heavy losses.Thirdly,bring representative action in the name of the supervisor,which is not only in line with the requirements of the theory of internal power balance,but also an important measure to reduce the agency cost of the company and improve the internal supervision mechanism of the company.