Board Of Supervisors System Of Listed State-owned Enterprises

As the reform goes further, the recombination and listing has become an important trend of Chinese State-Owned Enterprises (SOEs). Listing of SOEs will not only help them to improve the corporate governance structure, strengthen the modern enterprise system, but also help them to optimize their finance structure, avoid financial risks and become bigger and stronger. With the increase of listed SOEs, the demand of strengthening supervision is growing. At present, there are many problems existing in the system of Board of Supervisors of listed SOEs. The Board of Supervisors doesn't play its due role as it should be in the governance of the listed SOEs. So it is required to analyze the current situation of the Board of Supervisors of Chinese listed SOEs, put forward reasonable and feasible recommendations, and promote the Board of Supervisors to strengthen its role of supervision, meeting the needs of the development of the listed SOEs.The paper consists of four parts.The first part represents the basic concept of the system of Board of Supervisors, specifies the agency cost theory and separation of powers with check balance theory, which lays the foundation for the study of theory of the Board of Supervisors. This part also discusses the role of Board of Supervisors, and confirms the necessity of the existence of Board of Supervisors system.The second part respectively refers to the supervision modes of UK, U. S., Japan and Germany, then analyses the main features of supervision systems of these different countries. From the above, the author concludes that the mode of supervision in a country connects with its history, tradition and basic national conditions, so it can't simply say which is better. For this reason, we should learn the supervisory experiences of different countries on the base of our basic national conditions.The third part reviews the history of the supervision system of Chinese SOEs, introduces the current situation of supervision system, and enumerates a series of problems existing in the Board of Supervisors of listed SOEs, such as unreasonable selection mechanism, scanty independence of Board of Supervisors, obscure provisions of the relevant authority, insufficient incentives for supervisors, asymmetrical accountability, and so on. According to the analysis of those problems, in the author's opinion, the reason is path dependence of economic development model of our country, scantiness of the details of Board of Supervisors system theory, imperfection of the law, uniqueness of equity structure of listed SOEs, and so on.In the fourth part, in accordance with problems existing in the Board of Supervisors of listed SOEs, the author gives some advice about improving the system of the Board of Supervisors:(1) The train of thought is to improve and perfect correlated rules, aiming at enhancing INDEPENENCE of the Board of Supervisors. In the meantime, it should be transform the method of optimizing the Board of Supervisors from Administration-orientation to Market-orientation. (2)It should be improve the composition of the Board of Supervisors, including specifying the qualifications of supervisors in both positive way and negative way, leading external supervisors into the Board, deciding a reasonable size of the Board, limiting the tenure of supervisors, and coordinating the Board of Supervisors with Old Three Committees, Audit Committees and the Independent Directors. (3)Reasonable compensations and security mechanism of the funds should be established. (4) It should be enlarge the function of the Board of Supervisors, including securing the right to know, perfecting the ways of fiscal supervision, endowing with the voting rights or veto power on important matters, and so on. (5) The accountability of the Board of Supervisors should be make clear, and exception mechanisms, which in the Board of Directors, should be set up.