Corporate Governance in China: Research and Evaluation

CHAPTER 5

Research on Evaluation and Index of Supervisors' Committee Governance

The improvement of internal supervision mechanisms is the key to corporate governance and reduction in governance risk. Different market economy countries have significant differences in practice of internal supervision due to their differences in ways of economic development, social traditions, politics and legal mechanisms. Germany carries out a double-layer mechanism of separation of directorate and supervisors' committees, which possess more of a monitoring function. German corporations law regulates that all corporations should have a double-layer mechanism, including administrative and supervisors' committee in the directorate. The former is composed of executive managers responsible for daily affairs, and the latter is the controlling department responsible for nomination and appointment. Supervisor committees in Japan are different from the single-layer mechanisms of America and Britain and double-layer mechanism of Germany. In Japanese companies, directorates and supervisors' committees are both elected by the general meeting of shareholders, and the latter supervises the former. The particularity of establishment of supervisors' committees in Chinese corporate governance creates the particularity of the evaluation of supervisors' committees in the evaluation system of corporate governance.

Review of evaluation of supervisors' committee governance

Compared to other compositions of the evaluation ...