Study On The Design Of Controlling System Of Board Of Directors

During the development and evolution of company form,the right of ownership and the right of management separate,therefore,the company must be managed.Also,the board of directors comes into being as a result of the establishment of an open capital market,as well as the socialization of stock rights.As companies of the modern times gradually expand,as stock rights separate,the board of directors plays an increasingly important role in company management,gradually becomes the hub of modern company management,and becomes the organizer of the company management,as a result,to have the right to control the board of directors is to have the right to control the company.This is particularly true for the founding members-firm control of the board of directors is vital for securing external financial support and having control of the company.However,in China,currently,the board of directors is not independent,because it is constrained by big shareholders,leading to problematic operation of the board of directors,at the same time,enterprises often neglect the design of the system of the controlling right of the board of directors in the early stage of establishment,so board of directors becomes a vehicle for usurping controlling right of the company.To tackle this problem,the paper adopts document research method,case study method,induction method and analysis method,uses the controlling system of the board of directors of Alibaba Group as an example,introduces the major contents,shortcomings and referential significance of the terms for selecting and appointing directors of Alibaba Group.Meanwhile,in the paper,under the current circumstances of establishing companies in China,several systems for controlling board of directors,such as rotation system of board of directors,constraints on directors nomination,cumulative voting for directors selection,etc have been proposed;the major contents of these systems have been introduced;the practical cases of applying these systems have been talked about;the legitimacy and feasibility of these systems have been analyzed,thus offering reference for companies’founders in China while designing the controlling system for board of directors.Finally,the paper puts forward articles of association dichotomous approach,differentiated voting,and suggests the revision of relevant laws,thus providing a more relaxed,diversified developmental environment for Chinese companies.