In a modern corporate governance structure, independent directors and the board of supervisors are both important components, each with different responsibilities and functions. However, in practice, how to divide labor and cooperate between the two is a worthy question. In this article, we will discuss the responsibilities and functions of independent directors and the supervisory board, as well as the division of labor and cooperation.
1. Responsibilities and functions of independent directors.
Independent directors are important members of the board of directors of the company, they have no direct contact with the company's management, and can stand in an objective and impartial position to supervise and evaluate the company's business decisions. The main responsibilities of independent directors include:
1.supervise the company's management to ensure that it acts in the best interests of the company and shareholders;
2.Review the company's financial reports to ensure they are true, complete and accurate;
3.Review major investment, financing, asset disposal and other matters, and provide professional advice;
4.recommending external auditors and supervising their work;
5.Protect the interests of small and medium-sized investors and maintain the image of corporate governance.
Independent directors have extensive professional knowledge and experience, and can provide strategic guidance and advice to the company to help the company make scientific and rational decisions. At the same time, independent directors can also enhance the transparency and governance of the company and enhance the trust and confidence of investors in the company by performing their duties.
2. Responsibilities and functions of the Board of Supervisors.
The Board of Supervisors is another important part of the corporate governance structure, and its main responsibility is to supervise the behavior of the board of directors and senior management to ensure that the company's business behavior complies with the provisions of laws and regulations and the company's articles of association, and protects the interests of the company and shareholders. The specific responsibilities of the Supervisory Board include:
1.Supervise the company's financial status and check the legality, compliance and authenticity of financial reports;
2.Supervise the company's business activities to ensure that they comply with laws and regulations and the company's articles of association;
3.supervise the conduct of the board of directors and senior management to prevent them from harming the interests of the company and shareholders;
4.Evaluate the company's internal control and improve the company's risk management and internal control level;
5.It is proposed to convene a general meeting of shareholders to review and evaluate the work of the board of directors.
The members of the board of supervisors are usually composed of shareholder representatives and employee representatives, and have a wide range of representatives. The Supervisory Board may conduct independent investigations and evaluations of the conduct of the Board of Directors and senior management and report to the General Meeting of Shareholders. This helps to safeguard the interests of the company and shareholders, and improves the company's transparency and governance.
3. Division of labor and cooperation between independent directors and the board of supervisors.
Independent directors and the board of supervisors each have different responsibilities and functions in the corporate governance structure, but there is also some overlap and overlap between the two. In practice, the two need to carry out effective division of labor and cooperation to jointly promote the improvement of corporate governance. Specifically:
1.Clear division of labor: Independent directors and the board of supervisors should clarify their respective responsibilities and functions to avoid overlap and overlap. Independent directors should focus on the company's strategic planning, major decisions, financial reporting, etc., while the supervisory board should pay more attention to supervising the behavior of the board of directors and senior executives. In areas where the responsibilities of the two overlap, they should be resolved through consultation on a case-by-case basis.
2.Information sharing: Independent directors and the board of supervisors should establish an information sharing mechanism to strengthen communication and collaboration with each other. Through information sharing, the two can have a more comprehensive understanding of the company's operating conditions and existing problems, and better perform their respective responsibilities. At the same time, information sharing also helps to improve the transparency and governance of the company.
3.Mutual support: Although the responsibilities of independent directors and the supervisory board are different, they are both to protect the interests of the company and shareholders. Therefore, the two should support and cooperate with each other to jointly promote the improvement of corporate governance. In some cases, independent directors and the supervisory board may work together to address the issues and challenges facing the company.
4.Joint supervision: The independent directors and the board of supervisors shall jointly supervise the company to ensure that the company's business practices comply with laws and regulations and the company's articles of association. Through joint supervision, we can have a more comprehensive understanding of the company's operating conditions and existing problems, improve the company's transparency and governance, and enhance investors' trust and confidence in the company.
5.Mutual supervision: There should also be a supervisory relationship between independent directors and the supervisory board. Independent directors may supervise the performance of duties by the Board of Supervisors, and the Board of Supervisors may also supervise the performance of duties by independent directors. This relationship of mutual oversight helps to promote both parties to perform their responsibilities and functions more seriously, and to improve the transparency and governance of the company.
6.Establish an effective communication mechanism: Independent directors and the board of supervisors should establish an effective communication mechanism, including holding regular joint meetings and setting up liaisons. Through an effective communication mechanism, the collaboration and cooperation between the two parties can be strengthened to jointly solve the problems existing in corporate governance. It also helps to improve the transparency and governance of the company.