Introduction: "A great board of directors creates a great company." As the core of the internal governance structure of the company, the board of directors is the key to improving the corporate governance system. No matter what kind of corporate governance model is used, the quality of the board of directors is the core factor that determines the level of corporate governance. Whether a company can be dynamic and stand out in the competition depends on the board of directors. Correctly handling the relationship between the board of directors and all levels, and constantly improving the board of directors operating mechanism that conforms to the company's own business characteristics is the fundamental reason why a company can stand for a long time.
. Basic interpretation of the board of directors?
Answer: In the modern corporate governance structure system, the board of directors is the "bridge" that links shareholders and management, an important "platform" for other governance mechanisms to play a role, and it is also the basic internal control system of corporate governance mechanism . Therefore, the quality of the board of directors is an important indicator that determines a company's future performance and equity returns. As the business decision-making body of an enterprise, the board of directors is mainly composed of directors.
In addition to directors, the board of directors also has some affiliated institutions or positions, such as the board of directors' secretary and the board of directors' professional committee. These institutions and positions are all formed or appointed by the board of directors to assist the board of directors to carry out specific decision-making and business activities and be responsible to the board of directors.
. The status and function of the board of directors in corporate governance?
Answer: In the entire internal mechanism of corporate governance, board governance occupies a core position. The board of directors, as representatives of shareholder interests, has dual functions: on the one hand, as an operator, must be responsible for the company's major business decisions; formulate policies and systems; be responsible to all shareholders and report the company's operating conditions to shareholders to ensure that the company's management behavior complies with national regulations; hire managers to operate the company to increase the value of shareholders' assets; on the other hand, it must perform supervision duties, supervise the behavior of managers, and prevent them from damaging the interests of shareholders.
The functional positioning of the board of directors is granted by shareholders (shareholders' meeting). The board of directors will re-authorize part of the power authorized by the shareholders' meeting to the management level based on the business characteristics of the company and the situation of the board of directors, thus forming a multi-level agency behavior. From this perspective, the management is responsible to the board of directors, not to the shareholders' meeting.
"Company Law " Positioning the role of the board of directors:
) The board of directors is the company's decision-making body, elected by the shareholders' meeting and authorized to carry out work in accordance with the requirements and authorization of the shareholders' meeting.
) Responsible to the shareholders' meeting Board of Directors is the core of corporate governance and plays a crucial role. In actual operations, the board of directors must focus on three aspects: economy, strategy and efficiency to ensure the sustainable and healthy development of the company. Document No.
6 Positioning the role of the board of directors:
"Guiding Opinions on Further Improving the Governance Structure of Corporate Persons in State-owned Enterprises" (Guobanfa [2017] No. 36) pointed out:
) The board of directors is the company's decision-making body.
) The board of directors must be responsible to the shareholders' meeting, implement the decisions of the shareholders' meeting, decide major matters of the company in accordance with the statutory procedures and the company's articles of association, accept supervision from the shareholders' meeting and the board of supervisors, and conscientiously perform the duties of decision-making and control, internal management, risk prevention, and deepening reform.
State-owned sole proprietorship companies should implement and maintain the board of directors' powers to exercise major decisions, personnel selection and employment, salary distribution and other powers, enhance the independence and authority of the board of directors, and implement the annual work report system of the board of directors; the board of directors should communicate fully with the party organization, carry out the pilot program of the board of directors of the wholly proprietorship companies in an orderly manner, and strengthen management and supervision of the management level.
New state-owned enterprise Functional positioning of the three governance entities
. What is the role of the board of directors in corporate governance?
Answer: (1) The board of directors, as the representative of the company, has established good relations with all parties. All parties include all shareholders, government agencies, public, external cooperative units of enterprises, creditors, and internal employees at all levels.
(2) While focusing on the long-term interests of the company, the decisions of the board of directors must also take into account the interests of all parties such as large and small shareholders of the company, company creditors, and company employees. The operation of the company's board of directors must comply with the requirements of relevant laws and regulations on corporate governance and the company's articles of association.
(3) The board of directors has the legal right to control the company's financial rights, and also bear corresponding obligations and responsibilities to the company in accordance with the law. The board of directors should ensure that the board of directors should be managed by it, and resolutely ignore what should not be managed by the board of directors, which not only plays the decision-making role of the board of directors, but also gives full play to the enthusiasm of other institutions such as the management level. "It must be in place" and "it must not be offside."
4. What is the governance capacity displayed by the board of directors in corporate governance?
Answer: As the core of corporate governance, the board of directors has the role of decision-making and supervision. Therefore, the key to the governance of the board of directors is to implement joint governance through a series of internal and external mechanisms to ensure the scientific nature of decision-making and the effectiveness of supervision, so as to ensure the maximum interests of stakeholders in all aspects of the company. The scientific nature of decision-making is the most important governance capability of the board of directors. Through the professional capabilities of the directors and the support of a series of auxiliary institutions, the board of directors makes decisions that are in line with the long-term interests of the company and the interests of various shareholders to maintain the long-term development of the company.
The supervisory role includes two aspects. On the one hand, the board of directors must establish an effective mechanism to supervise the implementation of the board of directors’ decisions at the management level to ensure that the decision is guaranteed. On the other hand, the board of directors must supervise the management's actions not to harm the interests of the company or shareholders.
5. At present, what are the different styles of boards exist?
Answer: There is no clear classification of the board of directors in China. According to the functional classification proposed by the National Federation of Directors Advisory Committee (NACD), it can be divided into four categories:
(1) Rubber-stamp board (rubber-stamp board). is double-low type. This style of board of directors has low concerns about interpersonal relationships and work. It cannot play a real role as a board of directors and is often formed to deal with company laws. Generally speaking, "purse companies" located in overseas tax havens mostly fall into this category. There are also some private closed companies that treat the board of directors as a decoration. Such boards of directors are often decided by individuals on the board of directors, or because important figures can meet frequently, decisions are usually made at the management level, so even board resolutions are just to perform statutory procedures.
(2) Country-club board (Country-club board) . It has a high level of concern for interpersonal relationships and a low level of concern for work. This kind of board of directors is more emotional than making business decisions. Its characteristic is that there are often many ceremonies when holding board meetings. Legendary experiences and myths about the company often appear at board meetings. Board meetings always follow a fixed model. After calculating the company's traditions, they praise their merits and suppress their innovations. These boards of directors often exist in some companies with early establishment and outstanding achievements. Under this kind of board governance, corporate governance is actually operated by senior management.
(3) Representative board. This style of board of directors is more concerned about work than interpersonal relationships.In such a board of directors, different directors clearly represent shareholders with different interests, or different stakeholders, especially investment institutions and banks, etc. Such board discussion issues are easily politicized, and they are quarreled like the legislature, and the discussion process is often tit-for-tat. Such a board of directors’ “basis and balance of power” is crucial. But such boards have an important impact on corporate decision-making.
(4) Professional board. , a board of directors, can perform its functions well and realize the mission of the board of directors. It pays great attention to both work tasks and interpersonal relationships. The formation of this style is closely related to the role of the chairman, and the chairman of a professional board of directors has strong leadership abilities. Discussions between board members are very pragmatic, mutually understanding and respectful.
Case: A state-owned enterprise group sets different functions for different company types
6. What is the current situation of the board of directors in my country?
Answer: From the perspective of board structure and operation, the majority of internal directors of non-listed companies in my country account for the vast majority. The unreasonable board structure leads to imbalance in power. The board of directors achieves the goal of controlling the company layer by appointing a company manager that meets its own interests.
At present, the directors and managers of most state-owned enterprises in my country are still appointed by the controlling shareholders. Their powers exercised on behalf of shareholders are too great, and there are even many cases where the chairman serves as the general manager. The general manager replaced some of the powers of the board of directors and undermined the board of directors, managing himself, evaluating himself, and becoming a veritable "internal controller". The function of the board of directors, especially its supervision function is not sound.
Except for the vast majority of the board members, they are managers of our company, and there are generally lack of some auxiliary institutions (professional committees), and some enterprises. Although various professional committees are established under the board of directors, their role is limited and largely an expert deliberative body, which is almost entirely composed of insiders, and it is difficult for the company's senior managers to effectively supervise the company's senior managers.
7. What are the problems existing in corporate governance of the board of directors of listed companies in my country?
Answer: (1) Lack of the property rights basis to form checks and balances of power, and equity is highly concentrated. my country's listed companies lack the property rights basis for forming checks and balances, which is mainly manifested in the unreasonable equity structure. Most of my country's listed companies are transformed from state-owned enterprises, and their equity is highly concentrated, which makes the largest shareholder almost completely dominate the company's board of directors using his controlling position, resulting in an imbalance in the corporate governance structure.
(2) Lack of good accountability mechanism . In terms of concepts and behaviors, individual directors often represent and pursue the interests of themselves as individual individuals or specific shareholders, rather than representing the interests of the entire company and pursuing the maximum value of the company. The division of responsibilities of the shareholders' meeting, the board of directors, and the board of supervisors is unclear, and it is often a rubber stamp and is useless. During the company's information disclosure process, obvious profit manipulation and insider trading in the equity market often occur.
(3) Formalization of board meetings
First of all, the number of board meetings is too small, and many companies only hold board meetings once a year. Secondly, the content of the board of directors meeting is unreasonable. The focus of the board of directors of our company and the work is on business planning and financial arrangements, and there is not enough attention to the long-term strategic planning of corporate development. In addition, the absence rate of directors at board meetings is always high.
8. What processes have the construction of the board of directors of central enterprises in my country gone through?
Answer: The construction of the board of directors of central enterprises has gone through the process from "pilot" to "comprehensive construction".
first phase, started in 2004, with the approval of the State Council, the State-owned Assets Supervision and Administration Commission carried out a pilot project to standardize the construction of the board of directors, and determined that 7 state-owned enterprises, including Shenhua Group, Baosteel Group, Chengtong Holdings, and China Pharmaceutical , were the first batch of pilot enterprises. The SASAC takes external directors as the core system, transforms the top leader’s responsibility system into decentralization and checks and balances, realizes the separation of decision-making and execution organizations, and gives full play to the role of the board of directors in major strategic decision-making, risk management, and management management.
The second phase began in 2010. The State-owned Assets Supervision and Administration Commission decided to change the standardized system construction of the board of directors of central enterprises from "pilot" to "comprehensive construction", and the number of pilot enterprises continued to expand, and standardized boards of directors of 10 central enterprises, including Guotou.
The third stage is around Before and after the Third Plenary Session of the 18th Central Committee of the Communist Party of China, the standardized construction of the board of directors of central enterprises began to expand rapidly. Compared with the second stage, not only did it double in number, but it also accelerated significantly in progress.
By 2017, all the corporate reform plans at the central enterprise group level were approved, and most central enterprises established boards of directors, with external directors accounting for the majority. At the same time, the SASAC has also carried out pilot projects to implement the powers of the board of directors in some central enterprises, and granted core powers such as medium- and long-term development decision-making power, performance appraisal power of management membership, salary management power of management membership, salary distribution management power, and management power of major financial matters to the board of directors of the pilot enterprises.
9. At present, what are the achievements in the construction of the board of directors of central enterprises?
Answer: (1) The "one-management" problem is effectively solved. In the past, there was a problem of the top leaders in state-owned enterprises as "one-management" which brought great risks to the business operations and also had a soil for breeding corruption.
(2) Operation decision-making is more democratic and scientific. Members of the board of directors within the enterprise, whether they are members of the Party Committee or deputy general manager, have a relationship with the Party Committee Secretary and General Manager, and therefore it is difficult to put forward sharp opinions and suggestions. The board of directors of state-owned enterprises has established a mechanism for external independent directors and has put forward clear requirements for the proportion of directors of the outsourcing department. External directors can express their opinions on major decisions independently, which is relatively detached and objective, and can effectively ensure the rationality of the company's decision-making. In practice, if external directors have major objections, the "insider" will basically not force the recommendation, and the check and balance mechanism plays a role.
(3) Enterprise management is more efficient and standardized. Build an active board of directors, and the strict requirements of the board of directors will enhance the sense of responsibility of the management and functional departments, and implement board of directors' resolutions more quickly and strictly. At the same time, by scientifically defining the rights and responsibilities between the board of directors and the management team, we will promote the construction of the professional manager system, effectively stimulate the vitality of the management team, and thus promote the rapid development of the company.
(4) Risk control is more stable and effective. External directors pay more attention to risks, and the company's awareness of risk prevention and internal control capabilities have been greatly enhanced. Many board-based pilot companies have proposals that are passed by the board of directors only after being rejected, deferred or reviewed multiple times. For example, when the board of directors of Shenhua Group was discussing the acquisition of a power plant project in a Southeast Asian country, external directors believed that the project faced social risks and rejected the acquisition proposal, thus avoiding potential losses.
0. What are the experiences in building the board of directors in central enterprises?
Answer: (1) The leadership of the Party is unified with the construction of the board of directors. In central enterprises, the Party Committee (Party Group) plays a leading role. By clarifying that the research and discussion of the Party Committee (Party Group) is a pre-procedure for the board of directors and the management, the direction of the direction of the board of directors and the management, the matters or alternatives that do not conform to the overall national situation, the direction of state-owned enterprise reform, the direction of enterprise development, etc. are clear, and the responsibilities and procedures for decision-making matters in the "three major and one major" are clear, and potential risks are effectively avoided. At the same time, clarify the responsibilities and authority of the enterprise party committee (party group) to "set the direction, manage the overall situation, and ensure implementation" and the board of directors "strategic management, scientific decision-making, and risk prevention and control". In the end, major business management matters will still be decided by the board of directors or the management level.
(2) regulates the functions undertaken by the board of directors. First, ensure the function of preserving and increasing the value of state-owned assets. The second is the function of ensuring the national economic and social security. Strategic control functions for major matters.
(3) Focus on the construction of external director system. Through a period of pilot projects, the setting of external directors will help improve the internationalization and standardization level of central enterprises; prestigious external directors can bring a good reputation to the company and improve the attractiveness and competitiveness of the company; external directors, especially independent directors, can significantly increase the independence of the board of directors, so that the company's decision-making is not disturbed by individual shareholders; external directors entering the board of directors can increase the transparency of key information, effectively avoiding the phenomenon of internal control of ; through pre-control and multi-party coordination, the company's risk prevention and control capabilities can be effectively improved.
1. In specific practice, how can enterprises clearly define and select the role of the board of directors?
Answer: The board of directors is the company's business executive body and business decision-making body. Generally, companies routinely define the responsibilities of the board of directors by their articles of association, and the articles of association are almost the same as quotes of the provisions of the Company Law. But in fact, within the framework of the law, shareholders define the role of the board of directors through authorization, and the board of directors also determines its own role through authorization of management within the scope of shareholder authorization, and each board of directors plays a different role. Clearly defining the role of the board of directors, that is, determining the division of responsibilities between the board of directors and management recognized by both parties. This is the starting point for improving its governance and establishing an efficient board of directors. Each board of directors should design its own organizational structure, select members, reform work procedures and behaviors based on its choice.
The board of directors is engaged in three types of businesses, including supervising the performance of the company and management; deliberating and formulating company's main decisions; providing advice and consultation to management. The specific combination of these three types of activities defines the role of the board of directors. Enterprises should choose "the board of directors preferred by the Navigator" and "the board of directors preferred by regulators based on the degree to which the board of directors is involved in the company's management affairs.
2. What are the factors that affect the board of directors’ choice of its own role?
Answer: First, the company environment. If the company is in trouble or has a risk of performance decline, the company's business is highly complex, and the company's industry is in a stage of rapid change, it is required to have a more invested board of directors.
2 is the shareholder’s requirement. Shareholders’ expectations determine the degree of participation of the Board of Directors in the company’s management affairs. If shareholders are far away from the company's operations, or are unlikely to have the experience and ability to participate in company decision-making and supervision, the shareholders may tend to rely more on the board of directors to perform their responsibilities.
Third is the relationship between the board of directors and the management level. When the management has established a record of successfully leading the company's performance and the board of directors increases trust in the management capabilities, the board of directors may want to intervene less in the company's management activities and hand over more management authority to the management.
4 The resources and capabilities that the board of directors have that match their hope to play a role, including the working hours that external directors can and are willing to invest, the experience and knowledge of the directors, and especially the understanding of the company they work for, are all practical constraints for the board of directors to play a role. If most of the board of directors are composed of part-time external directors or the directors have limited knowledge and ability, the board of directors will be less willing to participate in company decision-making and operations and play the role of the board of directors.
3. In the new organizational change, how does enterprises evolve from a "regulatory" board of directors to a "strategic" board of directors?
Answer: This question needs to start with the laws of corporate form evolution and the laws of board role evolution.
First of all, in the process of market ecology development, the enterprise form continues to evolve along the industrial value chain, and has experienced four typical organizational forms, including shareholder value form, elite value form, customer value form, and stakeholder value form, realizing the evolution from a low-level organizational form to a high-level organizational form. Among them, the elite value form is what people often call the "pyramid" form, and it is also a traditional Chinese corporate form, which usually adopts a regulatory board; the stakeholder value form is the product of the Industry 4.0 era and has not yet arrived, while the customer value form is the best corporate form in the new business era, which can also be called a new organization, and usually adopts a strategic board of directors. Therefore, the process of traditional enterprises transforming into new organizations is also the process of transforming from a "regulatory" board of directors to a "strategic" board of directors.
Secondly, in the process of corporate form evolution, the board of directors has also undergone corresponding changes. The four typical organizational forms have four different board forms, namely a single board of directors, a regulatory board of directors, a strategic board of directors, and a value board of directors.
Traditional enterprise transformation will move from an elite value form to a customer value form, so the board of directors will also move from a "regulatory" board of directors to a "strategic" board of directors.
4. What is a single board of directors?
Answer: It is mainly composed of controlling shareholders, relatives and friends or their agents. The so-called single means that the boundary between decision-making power and ownership and execution power is not clear, and is exercised by shareholders and their agents. All power is highly concentrated in the single decision-maker and finally controlled by shareholders, which belongs to a single decision-making model. Generally, traditional private startups and previous state-owned enterprises basically belong to a single decision-making model.
single-type board of directors fully reflects the will of the controlling shareholder. Today, it seems that the board of directors is more to meet the requirements of the company law, and therefore a formal decision-making body. Although the corporate governance structure also has basic operating procedures and rules and regulations, it is basically in vain, and the board of directors only plays the role of a "rubber stamp". This kind of board of directors still exists today, but the number is gradually decreasing. The problem with the single-type board of directors is that the board of directors, supervisory board, and management team have not formed a mutual restraint mechanism in the enterprise. Due to the lack of effective constraints and supervision on the management team, the management team has not made it concentrate on daily business work, which is very easy to cause the company's decision-making mistakes and moral deficiencies.
5. What is a regulatory board of directors?
Answer: It is mainly composed of shareholder representatives and elite representatives. The so-called "supervision" means to play the functions of supervision, promotion, constraints, and incentives. The controlling shareholder controls the shareholders' meeting. The elite team holds the executive power, and the board of directors needs to coordinate the value conflict between these two value entities. At this time, the board of directors exercises the business decision-making power, and the elite team exercises the business management power. The boundaries between ownership, decision-making power and execution power are very clear.
Shareholders convey capital value demands through board resolutions, and elite representatives convey elite value demands through board resolutions, and the two parties achieve coordination of value demands in the board of directors. At this time, in order to balance the contradiction between benefits and risks, the board of directors must both motivate and restrain the elite team. These two functions are both opposite and unified, so that the board of directors must adopt a team-based decision-making model. This regulatory board of directors is the main method currently adopted by traditional enterprises.
Regulatory boards mainly exist in enterprises with relatively separate shareholder ownership and executive power of the management. Since it is difficult for the shareholders to take into account the specific business decisions of the company, they must rely on the market-oriented professional manager mechanism to achieve the shareholders' business goals. At this time, using the board of directors as a bridge of supervision and communication between shareholders and the management level, and relaxing excessive control over the management level is a relatively good governance model.
6. What is a strategic board of directors?
Answer: The strategic board of directors is guided by market value needs and gives full play to the independent decision-making function of the board of directors. At this time, the company's equity structure is relatively scattered, shareholder composition is diversified, and employees generally hold shares. The board of directors is originally composed of shareholder representatives, elite groups, partners, employee representatives, and independent third-party representatives.
When the board of directors carries the value demands of many stakeholders, it prompts the board of directors to reflect the value demands of the enterprise organization and requires directors to represent the enterprise organization rather than a certain stakeholder. Therefore, in the end, the board of directors will be composed of a majority of independent directors to form a diversified independent decision-making model, namely democratic decision-making.
Because the shareholder composition is relatively scattered and a single equity has a weak impact on the enterprise, the function of the board of directors appears to be very powerful in the governance structure, and the strategic board of directors unified the value demands of different value entities.
Vanke The governance structure formed over the years is a typical strategic board of directors. Due to the lack of major shareholders that are sufficient to control corporate decisions, the strategic board of directors is very susceptible to the intervention of external barbaric capital. The Wanbao dispute reflects the major flaws of this governance model.
Strategic board of directors lacks shareholder control, and it is very easy to form insider control . The board of directors will use its control over corporate decision-making to gain benefits for itself. This requires social regulatory agencies (similar to stock exchanges) to implement effective supervision of the governance of such companies. It can be said that the maturity of the external regulatory environment is crucial to the formation of a strategic board of directors.
7. What are the main responsibilities of the board of directors?
Answer: The main responsibilities of the board of directors include the following four aspects:
(1) Determine the company's major decisions.
(2) Supervise and evaluate strategic planning and annual budget.
² Review the company's major investment plan
² Approve the company's profit distribution plan and dividend plan
² Apply the company's plan to increase or decrease the registered capital plan and issue company debt plan
² Decide the company's merger, separation and dissolution plan
² Decide the company's internal organizational structure and the setting of the senior management organization
(3) Supervise the company's management.
² Responsible for the succession plan of the company's president
² Appoint or dismiss the company's president
² According to the nomination of the president, appoint or dismiss the company's vice president, financial director and other Senior management personnel of the company
² Evaluate the performance of the top management
² Decide the compensation plan of senior management
² Decide the compensation plan of senior management
² Establish and maintain procedures to ensure the communication between legal and moral practices in the company
(4) and shareholders.
² Responsible for convening the shareholders' meeting and reporting to the shareholders' meeting
² Responsible for implementing or coordinating the resolutions of the shareholders' meeting
² Responsible for communication plans with external shareholders
(5) The board of directors' own construction.
² Recommendation of directors
² Settings, schedules and issues of board meetings
8. How can an enterprise build a professional board of directors?
Answer: As we all know, a typical feature of modern corporate governance is the separation of ownership and operating rights. In this case, enterprises need to reduce agency risks and control agency costs. The core is to build a professional board of directors.
The premise of establishing a professional board of directors must first solve the composition of the board of directors. We should promote the diversification of board members, introduce external directors, independent directors, and employee directors, change the pattern of excessive concentration of power and internal control, and improve the scientific nature and decision-making efficiency.
ensures that the agent will not deviate from the fundamental interests of the principal, so as to achieve supervision and checks and balances over the company's internal decision-making and management levels, and promote the company's sustainable development.
9. What issues should be considered when building the organizational structure of the board of directors?
Answer: The design of the board structure has attracted much attention in board governance, mainly because the structure is observable and the structural changes are measurable, but there is no universal ideal board structure model, and only some common experiences at home and abroad refer to it.
First of all, the operating structure of the board of directors must ensure the independence of the entire board of directors. The board of directors should be able to exercise objective and independent judgment on the company's affairs and perform its duties in the best interests of the company and shareholders.
Secondly, improve the professional committees under the board of directors. The professional committee of the board of directors refers to some branches within the board of directors established by the board of directors, which are composed of company directors established by the board of directors, who exercise part of the rights of the board of directors or provide assistance to the exercise of rights of the board of directors.
The board of directors is the meeting body. Establishing committees within the board of directors and making them work can overcome the phenomenon of management-centrism to a certain extent.
In addition, such as evaluating the performance of management and auditing of directors and management's performance of duties, it also requires supervision entities to examine and evaluate in the daily performance of their duties by directors and management. It is not enough to rely solely on discussions at board meetings. By dividing the work of the board of directors in different committees, it will help improve the work efficiency of the board of directors, help improve the quality and experience of directors, help external directors to strengthen their supervision and participate in company affairs, and it will also make it easier to clarify the obligations and responsibilities of directors.
0. What are the specifications and guidelines for the scale of the board of directors?
Answer: General enterprises: all need to set the board size according to the requirements of the Company Law. The Company Law stipulates that a limited liability company with a board of directors has a membership of 3 to 13 (Article 44), and the board of directors of Co., Ltd. is between 5 to 19 (Article 108).
The State-owned wholly-owned company that performs the duties of investor : In principle, there are no less than 9 people on the board of directors and no more than 13 people (Notice of the "Interim Measures for the Standardized Operation of the Board of Directors of Central Enterprises").
Listed companies: In addition to the Company Law, there are no other special regulations to constrain
1. Why should the scale of the board of directors be properly controlled?
Answer: The larger the board of directors, the greater the possibility of surplus management, and the worse the company's performance will be. The board of directors is relatively large, which also affects the board of directors' communication and coordination in decision-making, reducing the board of directors' decision-making efficiency.
In addition to independent directors, the board of directors of listed companies includes a certain proportion of non-executive directors. These directors are representatives of major shareholders and often do not receive salaries from the company or hold company shares. They are also an important reason for the large scale of the board of directors.
Increase the proportion of independent directors should start by reducing the size of the board of directors, rather than vigorously introducing independent directors.
2. How many directors should a company consist of the most reasonable, effective and operational?
Answer: The bigger the board of directors, the better, and the more directors, the better. This is a decision-making body, which must ensure the necessary efficiency. Therefore, when designing board members, in addition to considering the company's equity structure, governance goals and relevant policy requirements, it is also necessary to start from a small point and put science first based on the basic idea that is compatible with the development stage of the enterprise, start from small and put science first.
If it is a newly established company and is in the early stages of enterprise development, it can set up a three-person board of directors in combination with policies to improve decision-making efficiency.
If the company begins to enter the stage of rapid market development and has diversified shareholders, external support is needed. At this time, you can consider increasing the number of directors and establishing a board of directors of 5 or 7 people.
If the company enters a mature stage and has a large market scale, establishes subordinate investment enterprises, starts a national business layout, and has more capital market and social supervision requirements, it can continue to increase board members, enrich the source of directors, and establish a board of directors with 7 or 9 people.
If the enterprise has become a national, international and group company, it can be considered to build a board of directors with more than 10 people. If this stage has not been reached, it is not recommended that the board of directors be "fat" for the time being.
3. How do board members be composed?
Answer: When an enterprise builds a professional board of directors, it should promote the diversification of board members, introduce external directors, independent directors, and employee directors, and change the pattern of excessive concentration of power and internal control, so as to achieve the role of supervision and checks and balances over the company's internal decision-making and management level.
The composition of the board of directors is to form an active board of directors, mainly referring to the following aspects:
- The balance of the board of directors structure:
The structure of the board of directors includes knowledge structure, age structure, skills structure, equity structure, functional structure, etc. A well-structured and balanced board of directors can efficiently formulate decisions on the group's key strategies, which will benefit the group's long-term and short-term performance. The board of directors should clarify the skills and experience it needs as a team, timely supplement existing human resources, and cultivate and reserve talents for future needs.
- maintains the board of directors' diversity :
The main purpose of director selection is to nominate individuals with various professional knowledge, skills and expertise, thereby helping the group's correct decision-making and successful operation. Therefore, the board of directors should expand its talent pool and more widely include candidates who meet future strategic requirements, so that the board of directors can obtain the most valuable talents.
- combined with the actual needs of the group's development:
At different stages and periods of the group's growth and change, directors are required to have different qualities and abilities. The board of directors should constantly consider the actual situation and strategic needs of the group, and decide which director quality and ability are most conducive to promoting the improvement of board performance, are conducive to the current and future success of the group, and are conducive to the group having the most suitable and effective human resources at different stages.
4. Who should be included in the board of directors of state-owned enterprises?
Answer: The scientific nature of the board of directors comes from its structural diversity and independence. Therefore, various countries and a large number of corporate practices point to a board of directors with a relatively rich and diverse structure.
According to existing regulations, the board of directors of general state-owned enterprises must include three types of personnel:
category 1, and some senior management personnel within the company must become members of the board of directors. The Party Secretary must serve as the chairman, the full-time Deputy Party Secretary must enter the board of directors, the general manager shall enter the board of directors, and other senior management personnel shall serve as directors as necessary.
Category 2, shareholders are assigned to external personnel of the company. This type of personnel is usually called external directors, and is a full-time or part-time person selected by shareholder units to serve as directors of the enterprise. According to relevant policy requirements, external directors must account for the majority in companies that meet the conditions. This arrangement is to create checks and balances for internal personnel of the company and highlight the independence of decision-making.
Class III, employee directors. Employee directors are key positions for democratically participating in enterprise management through the election of the employee representative conference.
In addition, can also be equipped with other directors as needed due to the different development stages and business characteristics of each company. For example, companies that are preparing to go public and need more external experts can add independent director positions; companies with high technological content can add scientists to the board of directors, etc.
5. How are different board member types divided?
Answer: There are many types of board members, for example, directors can be internal directors, external directors, executive directors, non-executive directors, independent directors, non-independent directors, employee directors, etc. However, these types of directors are not in a juxtaposition relationship. For example, internal directors correspond to external directors, executive directors correspond to non-executive directors, and independent directors correspond to non-independent directors. In principle, they cannot be mixed at will.
6. What is an internal director?
Answer: Internal directors are also called executive directors. Generally refers to the current company's managers or employees and the managers or employees of related economic entities. They are not only employees of the company, but also employees of companies with economic relations with the company, such as the general manager of the parent company as a director of a subsidiary. Attending the board of directors is the obligation of internal directors, and salary as directors cannot be received generally. Since internal directors are internal employees of the company, their supervisory role in the corporate governance structure is relatively limited.
7. What is an external director
Answer: External director, as the name implies, is a concept proposed relative to internal directors of the enterprise. As early as the "Guiding Opinions of the State-owned Assets Supervision and Administration Commission of the State Council on the Construction of Board of Directors of Whole State-owned Proprietorship Companies (Trial)" (State-owned Assets Development Reform [2004] No. 229, now abolished), the State-owned Assets Supervision and Administration Commission of the State Council made the following definition for external directors: "External directors refer to directors who are not employees of the company."
The characteristics of external directors are different from those of the company's internal directors in that external directors do not hold any other positions in the company except for the relevant positions of directors and special committees of the board of directors, and are not responsible for the affairs of the executive level. In other words, external directors only serve as board members and special committee members of the board of directors in the company, and only play a role in company decision-making, and do not participate in the company's daily operations and the execution of decision-making matters.
8. Classification of external directors?
Answer: In my country, the concept of external directors was initially proposed at the level of central enterprises. According to whether external directors are full-time external directors and part-time external directors, they are divided into full-time external directors and part-time external directors. Those who specialize in the positions of external directors in several central enterprises are full-time external directors. In addition to the positions of external directors, those who also hold other positions in central enterprises or other units are part-time external directors.
9. How to select external directors in state-owned enterprises?
Answer: In my country, external directors of state-owned enterprises are generally mainly full-time external directors, and there are also part-time external directors, which are selected and appointed by the State-owned Assets Supervision and Administration Commissions at all levels.
So are external directors assigned by state-owned shareholders? Or do state-owned shareholders have the right to directly appoint directors to the invested enterprise?
Article 105 of the Company Law stipulates that the shareholders' meeting may implement the cumulative voting system in accordance with the provisions of the company's articles of association or the resolutions of the shareholders' meeting.
In other words, state-owned shareholders can only recommend candidates for directors to the shareholders' meeting, but they cannot directly decide the candidates for directors. If the election of the shareholders' meeting cannot be passed, state-owned shareholders should re-recommend new candidates for directors.
This also explains from a legal perspective that the directors are responsible to the entire shareholders' meeting and their diligence obligations to the company, rather than being responsible to the dispatched shareholders and their diligence obligations to the dispatched shareholders.
0. Where do external directors come from?
Answer: According to relevant documents, external directors should be experts or persons with practical experience in the company's main business investment, corporate business management, financial accounting, finance, law, human resources management, etc. External directors can be retired personnel from the civil service system or party and government organs, retired leaders or current leaders of state-owned enterprises, or experts and scholars in scientific research institutes, universities and various enterprises. When the SASAC selects and appoints external directors, it can specially invite well-known domestic and foreign experts, scholars, and entrepreneurs. It can be selected from relevant personnel of central enterprises, or it can be selected and hired publicly from the public. After being invited or applied to pass the review, the above-mentioned personnel will enter the external director talent pool of the State-owned Assets Supervision and Administration Commission, and the State-owned Assets Supervision and Administration Commission will select and recruit external directors from the talent pool.
1. What is the employment program for external directors of state-owned enterprises?
State-owned enterprises send (recommended) external directors to the investment institutions. There is no clear and clear provision at the legal and policy level, but referring to the general practices of state-owned enterprises and central enterprises across provinces and cities across the country, it can be summarized as follows:
(1) Job determination. The state-owned assets supervision agency proposes the quota and employment conditions for the proposed external director;
(2) Recommended candidates. proposes preliminary candidates from the external director talent pool, or adopts market-oriented selection and appointment methods, or recommends candidates from the company to be appointed;
(3) Communication opinions. communicates with the preliminary candidates on matters related to external directors' responsibilities, rights and obligations;
(4) organizes an inspection. investigates and understands the preliminary candidate situation with the current (formerly) unit or relevant departments in an appropriate manner;
(5) discusses and decides. The state-owned assets supervision agency determines the candidates to be hired according to the inspection situation and the position needs;
(6) written commitment. External director candidates should make written commitments to the Municipal State-owned Assets Supervision and Administration Commission and the company that there is no relationship between himself and the company that may affect the fair performance of his duties;
(7) is hired in accordance with the law. The state-owned assets supervision agency will issue a letter of appointment to external directors and specify the term of office. The original labor (personnel) relationship of the external directors remains unchanged and they do not enter into a labor contract with the company they serve.
2. How to distinguish between internal directors and external directors?
Request the full version of the e-learning courseware and the compilation rules of related learning materials. Please send a private message to the note and leave your contact information. The editor replied as soon as possible after seeing it. Thank you very much.
Note: (Please send a private message to the note to the note to the contact information) (Please send a private message to the note to the contact information) (Please send a private message to the note to the contact information)
