System Of Company Supervisor In China

It is vitally important for a company to have an effective supervision mechanism because the objective of corporate administration is to make the integrated decision scientific; This involves efforts in restrictions given by the group who have common interests, with the stock holders as the core, to the power of the highest management circle. The board of supervisors is one of the three important parts which constitute the governing structure in a modern company.Holding independent legal status, the board of supervisors can protect the normative operation of the company. However, presently, many deficiencies and flaws of our system of supervisors have appeared in both legislation and practice. Unfortunately, in our research, more is discussed about how to build up and perfect stock holder's meeting and about the supervision of board of directors. It is the confused ideas that lead to the difficulty in solving the problems of its nominal function and to a general tendency to weaken, and even cancel the supervision of the board of supervisors.The system of independent directors used to be a system of the national Company Law in the US and UK. In order to meet the need of our companies' listing abroad and to change the functional failure of the system of board of supervisors, under the propelling and guidance of China Securities Regulatory Commission, the system of independent directors has come to be established in China. This has led to the overlap and conflict in power reference between the newly established system and our former system of board of supervisors.Based on widely compared the mechanism of internal control in German , Japan and France , aiming at governance failure in companies in China , this assertion puts forward that although there are different mechanisms of internal control in these countries because of different jurisprudence , history and culture , the functions are all to handle insider control . The article analyses the problem theoretically and practically that the management break the rule and the board of supervisors cannot effectively supervise it. And the article try to perfect the board ofsupervisors so as to make our corporate governance reasonable by changing personnel structure and nomination, reinforcing the supervision of business execution and finance, stimulating and binding system . To solve the overlap and conflict in power reference between the newly established system of independent directors and our former system of board of supervisors , the relationship structure between them should be clarified , powers be definited, and guarantee measures be adopted. The corporate governance of the companies will surely be improved.