Audit Observation | The improvement and implementation of the audit committee system in the context of corporate law amendments

In 2021, in order to implement the requirements of the Party Central Committee on deepening the reform of state -owned enterprises, optimizing the business environment, strengthening the protection of property rights, and promoting the healthy development of the capital market, the company law has ushered in the sixth revision in nearly 30 years. When the first review of this revision draft, there were about 70 newly added and revised and modified items, involving the party's leadership of the party, improving the special regulations of state -funded companies, improving the company's establishment and exit system, optimizing the setting of the company's organization, improving the company's capital system , Strengthen the responsibility of controlling shareholders and operating managers, and strengthen corporate social responsibility. Among them, in terms of the establishment of the company's organization, the regulations of the audit committee set up by the board of directors are an important part of the amendment of the company law. In the context of corporate law amendments, this article aims to clarify the boundaries and scope of complementary functions of the Audit Committee and the board of supervisors, and clarify the specific path of the implementation of the rights and responsibilities of the two, and then combine the governance practice of state -owned enterprises to improve the governance of state -owned enterprises and the implementation of the Party Central Committee to deepen the Party Central Committee. The major decision -making deployment of state -owned enterprises provides feasible ideas.

Under the past single -layer or double -layer board governance model, whether it is based on strengthening the supervision needs of the board of directors and the manager, or the need to release the decision -making efficiency of the board of directors, it is necessary to adjust the current board governance structure. The problem of "not independence" and "weak professionalism" of independent directors, and the absence of supervision of supervisors (clubs) is also an important cause of the board of directors to govern and improve. The establishment of the professional committee of the board of directors represented by the Audit Committee can help the improvement of the governance structure, promote the implementation of the power and responsibilities of the board of directors, and improve the effectiveness. To improve and implement the audit committee system, we need a good human resources foundation and substantial power and responsibility content, so that they can coordinate the operation of the board of directors internally and achieve supervision and restrictions on the outside world. State -owned enterprises should gradually improve the division of power and responsibilities between multiple governance subjects including the audit committee, and achieve the same frequency resonance in governance efficiency.

Single -layer and dual -layer corporate governance structure and realistic dilemma

From the perspective of the company's law, the company's governance mainly refers to how to make the company's directors the representative of the interests of shareholders, rather than the representative of its own interests. The core is to deal with the interest relationship between directors and shareholders. In order to deal with the relationship between the two, to achieve the ultimate goal, two governance structures: "single -layer" and "double -layer". Among them, the manifestation of the governance structure of the single -layer company is mainly the introduction of the independent directors system. The manifestation of the governance structure of the double -layered company is mainly the setting of the board of supervisors.

(1) The functions of the board of directors under the single -layer structure play

Among the single -layer governance structure, there are board directors and no supervisors. The supervision of the company is mainly external (government, intermediary, market mechanism, etc.). The typical representative of the free market economy is an American company. Except for the shareholders' meeting, the board of directors is a compulsory agency, with no special supervision agency, and independent directors to perform the supervision function. Members of the board of directors of the shareholders' meeting, but due to the scattered shareholders, the control ability of the board of directors is not strong. The board of directors and the manager may submit the business answer sheet of "satisfactory" in order to achieve short -term benefits, ignoring the company's long -term interests.

(2) The functions of the board of directors under the double -layer structure play

In the governance structure of the dual -layer system, the board of directors and the board of supervisors participated in corporate governance at the same time, and played the governance functions. German and Japanese companies are representatives of this model. In the governance structure of German companies, the board of directors is divided into two levels: supervisory board (supervisory board) and management board. The supervisory board has the right to supervise the board of directors and appoint members of the board of directors. Its members are composed of shareholders 'representatives elected by the shareholders' meeting and employee representatives of union elections. As the lower part of the board of directors of the board of directors, the board of directors is responsible for the company's business activities. However, the board of directors and supervisors of the Japanese company is not established vertically, but parallel was established. Regardless of the use of vertical structure or parallel structure, the management of the operation functions of the board of directors has been greatly affected by the supervisory board of directors. On the one hand, the vertical settlement of the supervisory board of directors over -intervene in the management decision -making decisions of the board of directors has led to low efficiency; on the other hand, the existence of the existence of parallel supervision of the supervisory board of parallel to the supervision of the parallel settings is meaningless.

(3) The historical changes of the role of the board of directors

From the historical process of the development of the company's governance model, the overall transition from shareholders' conferences to boardism. In the 19th century, the company's size was small and the equity was relatively concentrated. The shareholders' conferenceism with the interests of shareholders was the protagonist; and after the 20th century, as the company's scale expanded and the equity became dispersed, the demand for board and professional managers was more obvious. The attributes of the shareholders' association as the company's owner and the board of directors as the company's operating decision makers are more obvious. However, with the important role of professional managers in the company's management and the actual impact of the controlling shareholder on the company's operation, boardism has a trend of being replaced by managers and controlling shareholders.

(4) The way my country's company law is adopted in the governance structure

my country's company law also uses "single -layer" and "double -layer systems" in governance structures. The independent director system is a specific manifestation of a single -layer system, and the setting of the board of supervisors is a specific manifestation of the double -layer system. However, the result of corporate governance practice has given scholars and practitioners different views on the choice of corporate governance structure in my country. If the board of supervisors is canceled; the supervisory board and independent directors system; the professional committee of the board of directors will be improved, and the professional committee will play the supervision function; No matter what choice of the corporate law, the purpose of the final purpose is to give full play to the system value of the company's governance and promote the improvement of governance efficiency. The system design of professional committees based on previous practical experience summaries will be more favored in achieving this governance goal. Development of the professional committee system

Company adopting a single -layer governance structure, due to the weakening of shareholders' associations, how to strengthen the supervision of the board of directors and the manager layer, becoming a problem that companies using single -layer structures need to consider. Strengthening the independence and supervision functions of the board of directors is the overall idea of ​​solving the above problems. The setting of the professional committees of the board of directors shows the role of the supervision of the board of directors and the manager. The professional committees of the board generally include strategic, nomination, audit, salary and assessment and other committees. The committee is generally composed of independent directors. The establishment of a two -layer structure to establish a supervisory committee, either the supervisory committee's intervention in business management is too large, affecting the efficiency of decision -making; or the supervision function is difficult to exert, flowing in the form, and it is difficult to play the role of supervision of the board of supervisors properly. my country's corporate governance structure also faces problems such as independent directors' independence and the supervisor's supervision and supervision functions. It is urgent to clarify future corporate governance trends through top -level design.

(1) The functions of independent directors are not in place

In 1992, the American Law Society proposed in its "Company Governance Principles: Analysis and Suggestions" that the board of directors were advised to introduce independent external directors; List the situation of important relationships. In 1992, the British Kedberry Committee suggested that at least three non -executive directors in the board of directors in their "Finance of Enterprise Governance", and two of them must be independent. These are the suggestions of the early British and American independent directors system. Return to China, from the "Guidelines for the Articles of Association of Listed Companies" in 1997 "Can Establish an Independent Director" to 2001 "Guiding Opinions on Establishing an Independent Directors System in Listed Companies" (abolished) "Listed Companies in June 30, 2002 Recently, appropriate personnel are appropriate to act as independent directors. "By 2022, the" Rules of Independent Directors of Listed Companies "" Members of the board of directors of listed companies should include at least one -third of independent directors ", etc., and the rules of independent directors in my country are basically mature. However, some scholars have pointed out that independent directors have not played a great role and cannot analyze the company's operating conditions like economic experts and financial experts. Some scholars have pointed out that the independent director system is too simple, failed to place them in the professional committee, and did not coordinate the division of labor with the board of supervisors, increasing the risk of cross -supervision function.

(2) Inadequate supervision and supervision functions

The supervisor system that faces an embarrassing situation like my country's independent director system, and has not been in place since its implementation. The situation that the board of supervisors is subject to the board of directors rather than the supervisor of the board of directors is normal, and the corporate law's regulations on the authority of the board of supervisors are also obviously insufficient. On the one hand, due to the general system design of the "capital decision", non -employee supervisors represent the interests of major shareholders, and the incidence of directors also has the same problem, which leads to the same interest circle of major shareholders, directors, and supervisors. It is difficult to play the function of supervision. Because of the labor contract between employees and the company's labor contract and the management of the company, it is difficult to avoid the impact of directors and other executive behaviors. On the other hand, although the current corporate law has given the supervisor (club) financial inspection authority, the supervision of directors and executives' supervision and proposals, etc., in view of the weakening of the supervisor's own professional experience and the actual implementation of the supervision method, it is difficult to be difficult Give play to the effectiveness of supervision. For example, whether the criticism of directors and executives can be recognized or implemented, it ultimately depends on the decision -making level; when exercising the power of financial inspection, it is necessary to have sufficient financial expertise. If the accounting firm hired by the shareholders will issue different audit opinions, the effectiveness of the audit opinions obtained by the Supervisory Board will be weakened. This contradiction is obviously not conducive to the improvement of corporate governance. Furthermore, the source of information or hindering the supervision of the supervisory committee. If the directors and executives do not actively provide business information, they are all searched by the supervisors. The passive in this supervision work will hinder the play of the supervision function.

(3) Function of professional committees: Take the Audit Committee as an example

It is the insufficient operation of the independent director system and the supervisory board system that has led to more attention to the construction and improvement of the professional committee system. The "Guidelines for the Governance of the Shanghai Stock Exchange Listed Companies" issued in 2000 has requested the establishment of professional committees such as the Audit Committee and other board of directors. In 2018, the China Securities Regulatory Commission requested that the audit committee must be set up in the revised "Guidelines for Listed Companies". It can be seen that the importance of the audit committee is self -evident. This is also a reference to the company's corporate governance experience of foreign listed companies. For example, since the late 1980s, German companies have generally established audit committees. The "German Corporation Governance Guidelines" suggested that the Audit Committee is also responsible for the task allocation of the auditors, determining the audit focus, the signing of business agreements, and the processing of compliance affairs including the compliance organization system review. Among the listed companies in the New York Stock Exchange, all the audit committees are provided. The reason why the reason for the professional committee of the board of directors is that the professional committees can exert the effectiveness of board governance to greater. On the one hand, the requirements of the professional qualifications of the professional committee make the professional committee can be named and truly realized. For example, the audit committee must be accounting professionals and other regulations. To a certain extent, the professional committee can play a supervision role in professional directions and help the high -quality implementation of the board of directors. On the other hand, for the composition of professional committees, most of the requirements are independent directors. They can integrate the independent directors and professional committees systems, and make up for the shortcomings of the independent operation scenarios, so that the two can truly help the company within their respective directors. Implementation of governance and responsibilities and improvement of effectiveness. In this way, professional committees can better coordinate the internal and responsibilities of the board of directors and the board of directors and the board of supervisors. In the context of corporate law amendments, the improvement and implementation path of the audit committee system

A highlight of the amendment of the company's law is the issue of the board of directors and the board of supervisors. Article 64, 125, and 153 of the draft, respectively, the selective settings of the board of directors and supervisors under the form of limited liability companies, joint -stock companies, and wholly state -owned companies, and given the optional and adjustment solutions for governance structure settings.

(1) Limited liability company, joint stock company optional plan

The core content of Article 64 and 125 of the draft is to specify the self -settings of limited liability companies, "Audit Committee" and "Supervisor (Council)" of limited liability companies, shares Co., Ltd. If the draft amendment can be confirmed, in the future, in the limited liability company and joint stock company, the supervisor (club) will not be an institution that exists, that is, after setting up the prescribed audit committee, you can choose to retain the supervisor (meeting) It can also integrate and absorb its functions, and the audit committee or other professional committees will be set up under the board of directors to undertake relevant functions. Looking at the practice of corporate governance at home and abroad, regardless of whether the supervisor agencies are continued, the establishment of a board audit committee is an overall trend. The audit committee's organizational design, the operation of power and responsibility, and the rules of discussions need to be planned in advance.

The establishment of an audit committee that complies with the laws and regulations is the first step in practicing the system. Compared with the limited liability company, the audit committee of the joint -stock company has additional requirements for members, which means that there is enough human resources supply. It is obviously not wise to barely put together a member of the audit committee. Therefore, the premise of establishing and using the system design of the audit committee is a good basis of human resources. At the same time, under the situation of localization and maturity of the board system and the localization of the board of supervisors and the system of the board of supervisors, in the process of the construction of the audit committee system, the backlog of contradictions in the implementation of the system is needed. On the one hand, this contradiction comes from the "unlimited" of the previous system, and on the other hand, it comes from the "raw and hard set" of the new system.

The audit committee that conforms to the original intention of the system design is the core of the implementation of the system. How to monitor the company's finance and accounting is a problem that needs to be solved by the value of the system. Otherwise, the Audit Committee is only another "Supervisory Board". Improve the positioning of the audit committee, the border of power and responsibility, and the rules of discussions, strengthen its own independence construction, enable it to truly exert professional advantages independently, coordinate the operation of the board of directors internally, and achieve supervision and restrictions on the outside world.

(2) Establishment of the audit committee of the wholly state -owned company

The core content of Article 153 of the draft is to stipulate the "no supervisors or supervisors, and set up an audit committee" in the wholly -owned state -owned company. Another focus of this draft is based on a section of "Special Regulations of the Existing French France in France", and set up special rules for state -funded companies to set up special rules, which have more ink regulations for state -owned companies. Compared with the general provisions of the aforementioned limited liability company and a joint -stock company, the audit committee among the wholly state -owned companies is compulsory establishment, and the supervisor (club) is forced cancellation. In the context of the party's leadership in the reform of corporate governance, the original functions of supervisors (clubs) were naturally undertaken by disciplinary inspection and supervision and audit committee. It did not continue to continue. In view of the compulsoryness set by the wholly state -owned company's audit committee, it is more important to clarify its membership composition and the operation of power and responsibility. According to the "Guidance Opinions of the General Office of the State Council on Further improving the Governance Structure of the State -owned Enterprise Legal Person" (referred to as "Guidance Opinions"), "the board of directors should establish a nomination committee, salary and assessment committee, audit committee and other special committees to provide consultation for the board decision -making, of which, of which, of which, the board of directors will provide consultation. Among them The salary and assessment committee and the audit committee shall be composed of external directors. " In this draft, the provisions of the "more than half of the external directors" and the "Guidance Opinions" in the "Guidance Opinions should consist of external directors" are slightly different. From the perspective of the governance practice of state -owned enterprises, all members of the audit committee are required to be external directors. On the surface, it has achieved formal independence, but it also causes obstacles to information circulation, and it is difficult to ensure that external directors and company operating decisions have the same frequency resonance. In this regard, maintaining the "more than half" expression may be more in line with the actual situation of state -owned enterprises. Of course, a system requires many system assistance to truly achieve value. No matter what kind of personnel composition, it is important to clarify the authority and responsibilities of the audit committee of the state -owned wholly -owned company, and clearly what the audit and supervision of the audit supervision should be to further improve the system of the audit committee. The setting of the board of directors of the board of directors will help coordinate the operation of the internal power of the board of directors and promote the improvement of corporate governance. However, as a professional committee under the board of directors, the audit committee, how to cut its own supervision attributes and the board of directors itself, is also a question that needs special attention in future governance practice. At the same time, while advocating the improvement of the audit committee system, we must also strengthen the improvement of the functions of the board of supervisors. Article 81 of the draft has added the provisions of the "Supervisory Board of Board to request directors and senior management personnel to submit executive duties", and also explains the trend of further improvement of the supervisory board system. No system is naturally self -consistent and requires a variety of systems to coordinate the operation in order to exert its own value. State -owned enterprises should further combine the framework of state -owned corporate reform, timely supplement the company's accumulation of the company's governance history, and use the east wind of reform to gradually improve the embedded integration of the party organization and the board of directors to give full play to the advantages of the socialist system with Chinese characteristics. , Establish a model for state -owned enterprise corporate governance. (Author Wang Haifeng unit is Jiangsu Province Coastal Development Group Co., Ltd.)

Source: "Audit Observation" magazine 2022, No. 7

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