Pi Haizhou: Listed Companies Should Carefully Set Up Directors Of Staff And Workers

According to the proposal of Changyuan group, the provisional shareholders' meeting in October 20th will modify the 107th articles of the articles of association, and decide that the board of directors shall consist of 9 directors, 3 of which are independent directors and 2 directors of staff representatives.

In the case of wall nuclear material, a strong vote against this proposal was cast.

In an open letter to all investors of the Changyuan group from walnut nuclear material, wall nuclear material said that if such a statute is amended successfully, the board of directors of Changyuan group will not be able to represent the interests of shareholders and become a company wholly controlled by insiders.

If such a arrangement becomes a precedent, it will injure the governance structure of China's listed companies and the healthy development of China's capital market. China's independent director system and the system of employee directors will become the laughing stock of the whole world.

In order to fight for control of Changyuan group, it is very normal for both sides to fight for the means.

From the results of the October 20th provisional shareholders' meeting, the Changyuan group won the victory, which means that the introduction of the "employee director system" was approved at the company's provisional shareholders' meeting.

Of course, because the representatives of one side of wal nuclear material can not normally enter the voting at the general meeting of shareholders, this makes the legality of the voting results of shareholders' meetings doubtful.

Moreover, Owen nuclear material has 11.7% stake in Changyuan group. It has the right to call for a provisional shareholders' meeting to apply for revocation of the motion for the establishment of a staff representative director.

The dispute over control of Changyuan group is probably not the decisive factor in a short period of time.

Apart from the dispute between the two sides on the control of Changyuan group, we should consider the establishment of the staff representative directors only from the perspective of improving corporate governance. I believe that as a joint stock company, we should be cautious in establishing the staff representative directors, especially at this stage.

Although the staff representative director system is an imported product, from the practice of our country, the staff representative director system is mainly applicable to wholly state-owned enterprises, and it represents the protection of employees' interests through the establishment of staff representative directors in the board of directors of wholly state-owned enterprises, as well as the ownership status of workers.

Therefore, the staff representative director system is a concrete manifestation of the requirements of state-owned enterprises to reflect the socialism with Chinese characteristics.

In the case of joint-stock companies, the establishment of the system of staff representative directors is relatively rare.

Of course, a joint-stock company is not entirely unable to set up a staff representative director. According to the 109th provision of the company law, the Limited by Share Ltd has a board of directors with five to nineteen members.

In the board of directors, employees can be represented.

The staff representatives in the board of directors shall be democratically elected by the staff and workers of the company through the staff congress, the staff meeting or other forms.

It is precisely because the clause stipulates that there are representatives of employees in the board of directors. Therefore, this has become the legal basis for a very small number of joint-stock companies to set up staff representative directors.

Nevertheless, it should be very prudent for a joint-stock company to set up a staff representative director.

After all, joint-stock companies speak on the basis of capital stock, and the directors of staff representatives are non shareholder directors. If they give the voting rights of the staff representatives and directors of shareholders, this is obviously a disrespect for capital.

Especially when there is a conflict of interests between the directors of shareholders, the final decision is to decide the outcome by the representatives of the staff and workers. This is undoubtedly a teasing of capital.

On this issue, it is necessary to distinguish the directors from the independent directors.

It is said that independent directors represent the interests of small and medium-sized investors. Therefore, the vote of independent directors is to a certain extent the exercise of voting rights on behalf of the majority of small and medium-sized investors.

Moreover, the directors of staff representatives are lacking in fairness.

The purpose of establishing a staff representative director in a joint stock company is to ensure that the original controlling party can increase the right to speak in the board of directors by setting up a staff representative director. This is obviously unfair to other investors, and is not conducive to protecting the interests of investors. To a certain extent, it is a violation of the principle of "sharing the same rights with shares".

In addition, from protection

Even in the perspective of protecting the interests of listed companies, the board of directors of listed companies has already set up independent directors, so there is no need to set up the position of directors of staff representatives.

Of course,

Companies also need to attach importance to the protection of workers' interests.

From the perspective of protecting the interests of employees, there are 118th specific arrangements for the company law.

The provision provides that the Limited by Share Ltd shall have a board of supervisors with no less than three members.

The board of supervisors shall include the shareholders' representatives and the appropriate proportion of the staff and workers of the company. The proportion of the staff representatives shall not be less than 1/3.

Because of this, the important task of protecting the interests of workers can be placed on staff supervisors rather than directors of staff representatives.