Research On The Lack Of Functions Of The Supervisory Board Of My Country's Limited Liability Company And Its Solution

The purposes of setting up the board of supervisors are:to ensure that a company's decision-making is correct and that the leaders can correctly perform their duties;to prevent the board of directors and the management from abusing their powers to harm the interests of the company and shareholders;and to ensure that the company is run normally,orderly,and regularly.However,in the actual and extensive corporate governance practices,some problems exist objectively,such as the board of supervisors' ineffective supervision,poor ability to perform its duties and poor performance.The actual effect of the functions of the board of supervisors is far less than expected.There is a lack of the functions of the board of supervisors,which is not optimistic.From the perspective of the reasons for the formation of these situations,there are subjective reasons and objective reasons;there are historical reasons and practical reasons;there are legislative reasons and operational reasons.Therefore,we should start from the theories in relation to a company's board of supervisors,as well as consider and analyze the current roles that a board of supervisors of a limited company plays,the status quo of and the reasons for the lack of the functions of a board of supervisors of a limited company in China,and the suggestions to deal with these problems.In summary,the following reasons result in the lack of its functions:China's historical traditions and inherent concepts have resulted in the insufficiency of the board of supervisors'principal position and its functions;the mechanisms,systems,and regulations in relation to the board of supervisors are not well established,and even with flaws;the board of supervisors are not independent enough;there is a lack of conditions for the board of supervisors to perform its duties,and there is a lack of capacity and capability to perform its duties;there is an absence of safeguards and incentives for performing its duties;there is no accountability mechanism in place when the board of supervisors fails to perform its duties actively.In response to these problems,we should identify the ways and approaches to solve the problems.Therefore,it is generally possible to consider the approaches in the following aspects:correcting the existing concepts in relation to corporate governance;reshaping the principal position of the board of supervisors;repositioning the functions of the board of supervisors;strengthening the innovation of the mechanism of the board of supervisors;constantly making changes to the ideas and resolving the problem in relation to the incentives of the board of supervisors to perform its functions;starting with the capacity building.of the members of the board of supervisors,enhancing their capacity to perform their duties,and improving the performance of their duties;improving the relevant supporting systems,and strengthening the necessary safeguards,incentives mechanisms,evaluation systems,and accountability mechanisms for performing its duties.