Title: Chinese Supervisory Board and Audit Committee - The Comparison of Two Cases
Abstract: Chinese listed companies adopt first a Supervisory Board (SB) and then the independent directors in a Board of Directors (BoD). Specially, the Audit Committee (AC) of BoD and the SB are both in charged with monitoring functions in China. It may present that dual monitoring roles of SBs and ACs simultaneously operate in one organization in China. What are the processes and relationships between Chinese SBs and ACs? China expects that the establishment of ACs after SBs will improve the internal supervisory mechanism of Corporate Governance. Particular attention is paid to the challenges that both roles are facing in compositions, operational processes of coexistence and the likely linkages to their relationships. This paper compares two experimental cases with and without ACs in China by interviewing the SBs and ACs chairmen and members with scarce resources. A matrix of two cases studies’ results on the main features is summarized and the findings are given to improve effective supervisory functions in China. This research results propose that China may build up a suitable internal supervisory mechanism to Chinese unique model by integrating all of the supervisory institutions in one entity and raising the rank position to strengthen the functional processes and interactive relationships among the related parties. Chinese supervision in practical operations needs greater consideration of the organizational and institutional relationships and overcoming operational challenges of functional processes call for further researches.
Publication Year: 2019
Publication Date: 2019-01-01
Language: en
Type: article
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