Reform On The Organ Of Power In Company Limited By Shares

In the modern company laws of various countries, it is a very important content that the power between the organs of company limited by shares is allotted and balanced. The rational power structure and perfect balance system among company's organs is the key to guaranteeing benign operation of company's business. In order to set up modern enterprise system, China's "company law"set up the fundamental system for power allocation and balance. The company law of China stipulates, the organs of company limited by shares fall into three parts--shareholders' meeting, board of director, supervisory board. Shareholders'meeting held by the participation of all shareholders is a supreme organ of company limited by shares. The board of director is the executive organ which carries out company's notion, guides the execution of company's business and represents the company. The supervisory board is the supervision organ of the company, which performs company's affairs, and checks the accountant affairs. The majority companies limited by shares in China result from the system reform of state-owned enterprise. All through the ages, legislators have paid great attention to the protection of state-owned shareholders'rights. However, China's state-run assets owner can't participate in company's management in the form of natural person, which put the company under managers'control. Meanwhile, because of the shortage of theory and practice, and less awareness on the buildup, nature, status, working principle, operation course and operation methods, etc., regulations on the shareholders'meeting the shareholders'meeting in China's "company law", have serious leak and defect, which presents in the way that the legislation of the regulations can't be manipulated and seen further. In addition, with the influence of the international situation at present and the decentralized shareholders, company's administrators'selfish desire expands day by day, which results in the uselessness of shareholders'meeting. At the same time, with the flourishing development of company's community responsibility movement and the strengthening of the function and status of non-shareholders, it's a kind of tendency for interests-related natural persons to participate in company's managing. Moreover, due to its inherent limitation and defect, the shareholders'meeting can't represent the interests of stakeholders and can't full play the role which company should have. Therefore, it is imperative to reform the organ of power in company limited by shares. Some scholars even advocate abolishing the organ of power in company limited by shares. However, because the ownership and management have been separates and due to the necessity to balance company's separated powers, the company can't survive without the organ of power, the same as the country can't without parliament. As a result, in order to solve this problem, it will be the beneficial exploration way to reconstruct a new organ of power in company limited by shares. Shareholders and non-shareholders accede to the organ of power in company limited by shares through managing, make up the company's congress and replace the original meeting of shareholders. Meanwhile, company's congress, the meeting body, is a non-standing organ of the company, which may result that the company can not solve in time the problems that the organ of power in company limited by shares should solve among the daily business activities. Therefore, we can use for reference from the establishment of the people's congress system of China and set up one Standing Committee for company's congress --the supervisory board, to manage the daily affairs related to stakeholders, to supervise the implementation of decision made by company's congress and to supervise the daily operation of the company. As a standing committee, the supervisory board is a higher authority of the board of directors; it can deal with daily affairs on behalf of company's congress, have the right to appoint and dismiss directors at the same time and supervise the daily operational and managerial activities of the company. In this way, the company limited by shares can be supervised by the organ of power and it's standing organ –the supervisory board, namely the shareholders and non-shareholders supervisetogether, rather than set up a special supervisory organ.