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Build the company's internal supervision system research

Author: LiuWeiMin From: www.yourpaper.net Posted: 2009-04-03 00:55:00 Read:
[Abstract] In this paper, the status of listed companies in China's internal supervision system and the defects of the analysis, support the independent director system point of view, several issues should be addressed by the independent director system and of introducing a simple analysis.
[Words] independent directors of Internal Oversight legislation perfection

Modern, as the separation of ownership and control of a typical form of business organization, its biggest feature is the original provider of the company's property away from control of the company's operations. "This model improves the efficiency of the company, but it also led to the sharing of property rights is inconsistent: the operating layer has decision-making power, the shareholders bear the consequences of their decisions, which possible abuse problem." In view of this, I suggested that we can learn from the Anglo-American law Department of the independent director system for regular monitoring.
Internal supervision system status quo of China's listed companies and defect
1. The status quo
Provisions in the Law of Supervisors and the Board of Supervisors as our company's internal oversight mechanisms, but the legislation too brief, the lack of maneuverability, loopholes in the system, and from a realistic point of view, these legislative The provision has not been implemented truly effective, therefore, our company, especially the work of the Board of Supervisors of the listed companies, there are still a number of failings. Many of the company's Board of Supervisors has not been into the role, the vast majority of supervisors did not 'supervisors' "In fact, in many companies, mainly by the trade union chairman, deputy party secretary of the Discipline Committee, the Chief of Finance of the Supervisory Board , can not be independent of the Board, therefore, look forward to their effective exercise of the supervisory powers quite some reluctance. In addition, knowledge, experience, and some supervisors can not perform their duties well.
2 Causes for defects
Specifically, leading to unfavorable supervision of the Supervisory Committee of the Company in China mainly due to the following aspects:
(1) institutional reasons. China's current large-scale companies, in particular, is the main sponsor of the listed companies is still the national or state-owned corporate enterprises, elected by shareholders supervisors of state-owned or state-owned assets on behalf of the corporate assets, the Board of Supervisors often arrangements executives furnishings, What is more, some of the company's Board of Supervisors became arrangement about to retire cadres veteran Bureau "In addition, some of the company's Chairman of the Supervisory Board (or Board of Supervisors) and supervisors has long been engaged in political work or administrative work, do not have basic financial knowledge, The audited financial statements through the motions phenomenon will be inevitable.
(2) Supervisors and the Board lacks the necessary independence. First of all, most of the supervisors and managers from the same unit, still remnants of an on-subordinate relationship, such as employee supervisor, supervisor of party secretary, so that's not bold oversight. Secondly, the lack of independence of the Board of Supervisors on the organization. In most cases, the appointment of a supervisor are part-time, non-permanent office, the supervisory boards of supervisors functions do not work properly, Finally, the board of supervisors to exercise its power of supervision must pay the costs, subject to the operation and management in practice staff, which also seriously affect the independence of supervisors may exercise the authority.
(3) Supervisors or the terms of reference of the Board of Supervisors insufficiency. China's "Company Law" to the power of the Board of Supervisors "supervision", but the "how supervision is left to the Articles of Association to resolve prevalent in our modern phenomenon of" dominance ", developed by the shareholders' meeting Articles of whether the provisions of the Board of Supervisors to improve the mechanism for exercise of authority is a great cause, this is also the practice of the Board of Supervisors can not exercise its statutory powers, such as the right to convene extraordinary general meeting is an example.
(4) The supervisory board and managing information asymmetry. In practice, the company's operating information lies in the hands of the board of directors and managers, the Board of Supervisors, even after screening the information provided is provided by the operating management, and therefore can not effectively supervise.
Analysis of the Independent Director System
Independent director system originated in the United States. The so-called independent directors, In addition to the role in the identity of directors and the board of directors not assume other duties, does not participate in the day-to-day operation and management of the company, with no equity in the company, shareholders or associated director of business relations. "They usually business celebrities, experts and scholars, and professionals, no conflict of interest between them and shareholders, the general meeting appointed as directors of the Company is responsible for the supervision of the internal director of business and corporate finance." Exposed in the securities market in recent years the development of a series of issues, the famous economics, legal experts, scholars have suggested, calling for the gradual establishment of domestic listed companies should learn from the successful experience of foreign corporate governance, sound and independent directors the system. Regulatory authorities in China also attaches great importance to, as early as December 1997 the China Securities Regulatory Commission issued the "Association of Listed Companies Guide 112 Regulations needed, you can set up independent directors". But which is optional terms. The SFC and guidance on listed companies to establish independent director system "(hereinafter referred to as" guidance ") was enacted in August 2001, the establishment of the independent directors of listed companies to make hard and fast rules. "Guidance" requirements: "in the June 30, 2002, the board of directors shall include at least two independent directors; June 30, 2003, the Board shall include at least one-third of independent directors. Establishing Independent Director System in China's listed companies and companies to be listed, but the trend of the times.
Third, China's introduction of an independent board structure
The board of directors of listed companies structural problems
In the United States, a member of the board of directors of listed companies structure is more reasonable, the internal directors represent a minority of the members of the Board, and the majority of the members of the Board of independent directors accounted for. China is just the opposite: First, the vast majority of the board of directors are all directors of the shareholders, they delegated by the shareholders, "ass command head"; Second, the operation of the Board of Directors of the Company are usually controlled by the controlling shareholder, rather than collective decision-making based on. Conflict of interest between the controlling shareholder and other shareholders are structural and universal; Third, many of the company's board members are part-time manager, the constraints of the Board of managers on the logical evolution of self-monitoring. The weakening of the supervisory role of the Board of Supervisors and even virtual, the results of the controlling shareholder of the helm for almost whatever they want. So the interests of the shareholder directors on behalf of the interests of shareholders - large shareholders control the Board of Directors - Board of Directors representing the majority shareholders.
Governance structure of listed companies
National Board of Directors of the Company in the United States and Britain is made of a single layer, its operations and supervision rolled into one, the establishment of an independent director on the Board of Directors audit committee, remuneration committee, nomination committee to strengthen the oversight functions of the Board, its corporate governance structure compatible generating system functions overlap and conflict. China's corporate governance structure, with specially oversight functions of the Company's board of supervisors system. If the independent director system, supervision of both rights division, is worth studying. In our country, the independent directors must be "seamless" access to our current corporate governance structure, it is necessary to play the effectiveness of the independent directors, the need to avoid conflict and no one is responsible embarrassing functional. One hand, Law expressly provides that the board of supervisors system, then you should begin to strengthen the supervisory functions of the Board of Supervisors; while on the other hand, the independent directors play a utility focused on the nomination of the inside directors, inside directors remuneration of managers paid as well as information on the company's financial audit and control role of the board of supervisors to collaborate.
3 independent directors resources and market issues
In Great Britain and the U.S., the manager resources are very rich, elected market is also very perfect, is also a great selection of the room. In our country, mostly as an independent director of a number of experts and scholars. Independent directors personally have the appropriate expertise, in particular, to be proficient in the financial, legal, management and the Company's business expertise. And as an independent director also need to have enough time conditions and economic conditions for protection. Independent directors on the economy can not rely on to serve as independent directors can get paid. Therefore, China must also devote great efforts to cultivate expertise and market of independent directors. Dare to introduce independent directors from abroad to meet their urgent needs.
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