A Study On Independent Director Governance Mechanism Of Chinese Listed Companies Based On Stakeholder Theory

Establishment of Independent Director Systems by Listed Companies Guiding Opinion issued by the China Securities Regulatory Commission(CSRC) in August 2001 is the mark of independent director systems was went to practice stage.Due to not long time of applying independent director systems to corporate governance, recently, there are few systematic researches on corporate governance mechanism, and much less systematic researches of independent director governance mechanism. How to establish effective independent director governance mechanism is in the exploring phase. With the deepening of reform of modern enterprise institution and the development of independent directors engage in corporate governance practice, to strengthen and perfect independent director systems will be one of the important contents of improving the corporate governance structures. The research on independent director governance mechanism will be more and more important and urgent. For these reasons, the paper tries to dive deep into this research.First of all, the paper gives a comprehensive background description of the independent director governance mechanism. A conclusion of the main corporate governance models in other countries is drawn from two perspectives, which identified the trigger of their constant development and clarified the main stages in that process. The paper also analyzes the four characters of the corporate governance development in our country and some beneficial or unfavorable situations. On the one hand, independent director is still in want of independence and assurance; on the other hand, independent director mechanism urgently needs to improve.Secondly, construct independent director governance mechanism and evaluation indicator system. Based on the stakeholder theory, the independent director governance mechanism should include enterprises dynamic mechanism, independence and assurance mechanism before setting up corresponding indicator system of empirical analysis. By conducting an empirical analysis of the 454 listed companies in Shanghai, economic value added (EVA) of unit capital is selected as a value indicator of company performance measurement.Thirdly, work out the optimal value of individual governance mechanism of independent director. On the basis of independent director governance mechanism indicator system, combined with actual data of the listed companies in 2005 and 2006, and some basic statistic indicators, such as, frequency distribution, calculate the ratio, coefficient of variation, etc, the paper carries out an empirical analysis of the individual indicator and company performance. The result indicates that, company size; fame and age of the independent director; management annual salary;concentration ratio of stockholders'equity; the unity of the board of director and the manager; salary, career and working place of the independent director; ratio of the independent director;the concurrent posts of the independent director; attendance of the independent director;all the above indicators are important to the company performance, and they are helpful in calculating the optimal corporate governance indicator value.Fourthly, work out the optimal value of fabricated governance mechanism of independent director. On the one hand, applying multiple linear regression analysis to demonstrate that the governing features of independent director is closely related with the company performance and this result is in correspondence with the individual governance analysis. On the other hand, applying data mining technology to the systematic research of independent director governance mechanism based on the stakeholder theory. The result manifests the distinct governing features of different company performances, which shows directly the change of company performance under the fabricated governance mechanism of independent director, reveals the governing features of independent director of the high performance company, and puts forward a systematic model of independent director governance mechanism.Finally, propose strategies to improve the independent director governance mechanism. Based on the empirical study of the individual and fabricated governance of the independent director and given consideration to the existing problems of independent director governance, the paper provides suggestions to improve the independent director governance mechanism according to motivation system, independence, assurance mechanism and legal construction, which serves as an inspiration to corporate governance perfection in future.The new point of this paper includes: (1) Based on independence, enterprises dynamic mechanism, group construction and the way to governance, this paper constructs independent director governance mechanism. It breaks the limitation of study only based on independence or dynamic mechanism, but studies systematically and comprehensively. (2) It demonstrates the efficient of EVA indexes through primary component analysis , Spearman correlation coefficient and linear regression analysis.(3) It makes the systematic research to get the correlation between independent director governance mechanism and company performance with multiple linear regression analysis and data mining technology, then have the result more directly than before, it is more practical to perfect corporate governance mechanism.(4)It proposes pertinent solutions to optimize independent director governance mechanism and offers reference for relative departments to make decisions.