Research On The Board Of Supervisors Of The Chinese Listed Companies

Nowadays, the world's economy is in the US-led condition, the popular internal oversight body of company is Auditing Committee being composed of independent directors. When China introduces and strengthens the independent directors and the Auditing Committee, the Board of Supervisors has been weakening. Therefore, some scholars propose to abandon the Board of Supervisors, but the reason is not convincing. Through analyzing the matching of corporate governance model with the market competition environment and Hofstede's cultural dimensions, as well as the objectives, tasks, and essence of Stakeholders Corporate Governance and functions of the Board of Supervisors, this article concludes that Chinese market competition environment and Hofstede's cultural characteristics are suitable for Stakeholders Corporate Governance Model, and China should unify the internal oversight bodies in company to strengthen the authority and independence of the Board of Supervisors.According to the provisions for the functions of the Board of Supervisors stated by China's"Company Law", the Board's governance function can be divided into during-process governance and after-process governance. The during-process governance refers to the Board's supervision in important decision-making, operation and management process; The after-process governance refers to the Board's supervision for the reliability and fairness of financial information. By the combination of matching test, factor analysis, regression analysis, the article conducts a comprehensive empirical testing for the Board's governance, and concludes that, among members of the Board, the share-holding supervisors can play a effective function in supervision, making the company more likely to receive an unqualified opinion, and playing a positive role in the suppression of earnings management and promotion of corporate performance; The worker-supervisors and gray supervisors can not play a positive governance role; The amount of shares and salary of supervisors can not reflect the difference of supervisors'performance, this is not good for supervisors'motivation; The Board's valid size is relatively small, and doesn't reach to the ideal level; Supervisors'meeting is not for control, but remedies; The Chairman of the Board from major shareholders may be helpful for authority, meanwhile, it also easily leads to self-supervision which is not valid. In addition, the governance scope of the Board is too narrow that supervisors just focus on the financial statements and neglect the decision-making and management, which results in the weak function of during-process governance. The ineffective during-process governance will restrict and lower the efficiency of after-process governance, and may lead to the overall invalid of the Board's governance.Based on these empirical results, the final part of this article makes use of a game model, aiming to strengthen supervisors'governance and lower the optimal probability of management's frauds, to propose six measures to improve the Board of Supervisors. Including: (1)Increasing the proportion of share-holdings supervisors; (2)Establishing the performance evaluation indicators for supervisors, giving awards for supervisors'effective governance; (3)Establishing clear and effective system for supervisors'responsibility; (4)Expanding the Board's size under the condition of a required proportion for share-holding supervisors; (5)Motivating supervisors'enthusiasm for during-process supervision; (6)Raising the educational level and professional qualities of supervisors.