Online ISSN: 2519-9730 | Print ISSN: 2523-0565
Volume 4 Number 3 March 2019
CHINESE SUPERVISORY BOARD-AN EXPERIENTIAL CASEPages: 19-33
Authors: Pao-Chen Lee
Chinese listed companies adopt first a Supervisory Board (SB) and then the independent directors in a Board of Directors (BoD). Both boards are appointed and report to the shareholders. Specially, the Audit Committee (AC) of BoD and the SB are both in charged with monitoring functions in China. China expects that the establishment of ACs after SBs will improve the internal supervisory mechanism of Corporate Governance. It may present that Chinese SBs have defects in implementation. Particular attention is paid to the difficulties that the SB is facing and to the likely causes to the cooperation with the AC. This paper applied an experiential case study of one listed company in China by interviewing the SB chairman and members with experience. A regulation comparison of the SB powers and duties between German and Chinese governance mechanisms is documented in this article and the issues raised in the interview point out the reasons in implementing ineffective SB through these distinct governance mechanisms. The findings not only listed difficulties in implementing SBs but also the values of keeping SBs in China will be useful for finding ways to improve the effectiveness of the supervisory institutions in China. Results are given there remains a strong need to strengthen the functioning of the SB and cooperation with the AC in the future. This also calls for further endeavors to understand the coordination of the supervisory institutions and functions in the future study.