| As one most important mechanism of corporate governance, the independent director system has been the concern of theorists and practitioners. And it has been in an evolution procedure from an endogenous natural system to exogenous enforcement sy stem. Initially, the independent director system arose spontaneously in the company with the development of the company, and it was widely applied in the United States' companies' operating practices. Subsequently, the independent directors acted an exogen ous system, which forces that the qualifying companies must be set up the independent director system as the requirements of the external system, such as the Investment Company Act promulgated by the United States in 1940. In the process of China Corporati on development, we can also see that the independent director system was advocated at the early stage, such as The Guidelines of the Listed Company Policy released by the China Securities Regulatory Commission(abbreviated as China SEC) in 1997, which refe rs to the establishment of independent directors as the company's requirement, and we can also confirm that the independent director system is forcibly set for listed companies, such as The Guidance of the Establishment of the Independent Director System released by the China SEC in 2001, which clears that the listed company must finish the independent director system setting with the minimum standards.So, with the popularity of the independent director system, there are some important questions which need for answers for theorists and practitioners' continuously exploring and focusing on. Namely, whether the independent director system should be the role of corporate governance? How its corporate governance role of the main performance? What is the mechanism play its role in corporate governance is? Part of the study and practice found positive role in the independent director system's institutional arrangement of corporate governance, but found some contradictions reverse effect, and more discoveries are n o appreciable effect on the conclusions.In related researches on Chinese listed companies, independent director system more showed no significant effect, namely independent director system useless, in fact, "Vase Director." So, whether the independent director system has a significant positive effect of corporate governance? Why apparently, independent director system does not show a good role? If the independent director system of corporate governance has a positive effect, what its mechanism acts? This dissertation attempts to answer these questions and show the clear answer to the role of corporate governance of Chinese independent director system, by sorting out the relevant documents, developing related research hypothesis based on the theoretical analyses, designing the empirical researches, and using Chinese listed company data to get the empirical research results.With further analyzing the existing institution theories, the institution will be divided into two categories, namely actively and pass ively settings institution. And based on the different constructing mechanism on the different economic level, there exist amount differences between these two from institutional arrangement to effect. For the actively setting system, which is generally spontaneously evolved by itself, or in order to better play the role it actively builds on mandatory restrictions, and therefore it has a positive incentive effect. And for the passively setting system, which is constructed mainly to avoid getting punishment as non-compliance from subject to external regulatory authorities, which has a negative incentive effect. When setting up the independent director system, if a company just passively sets to avoid punishment, the independent director system will be inevit ably lead to a formality, and greatly weaken the positive effect of its own corporate governance that it should have; on the contrary, only active setting the independent director system can provide more effective corporate governance role for the company.Moreover, the literature review found that previous studies have focused on the direct action level of the independent director system itself, but did not consider the board system, and even the whole corporate governance system as a complex system. This ignores the interactions between different constituent mechanisms in the corporate governance system. And further under the combined appearance effect of corporate governance arrangements, some constituent mechanism will produce no effect; meanwhile on th e objective, it will result in a common indirect effect with other mechanisms.Based on the above analyses, the conclusion of uselessness of the independent director system may be derived from the relevant studies did not distinguish between its active an d passive settings, and did not consider the interaction with other corporate governance mechanisms. Therefore, there are two important dimensions of the actively setting of independent directors, one is independent director actively setting based on the n umber of independent directors, and the other is independent industry reputation based on employing independent directors holding concurrent posts in the same industry companies. This dissertation focuses on these two, and in-depth studies the direct corporate governance roles by their selves and the indirect corporate governance roles with other board governance mechanisms, to break the conclusion that independent director system had no effect, namely "Vase Director" puzzle.This dissertation builds the empirical models using company performance and earnings quality as the result proxies of the corporate governance role within the two measure dimensions of the firm value, and the single forms of independent director actively setting and independent director industry reputation and cross-multiplied forms with other board governance mechanisms proxies. And achieve the research conclusions using descriptive statistical analysis, independent samples t-test and regression analysis to complete the appropriate empirical researches with 1999-2014 China's A-share listed company data. To ensure reliability, this dissertation uses ROS and ROA, ROE and EPS, BHAR(buy-hold abnormal return) and Tobin's Q, accrual-based and real-activity-based earning quality, and independent director industry reputation and high independent director industry reputation as pair alternative proxies to ensure the robustness of the studies. And in order to avoid the problem of the low proportion of the sample number, this dissertation also uses the paired sample of the independent director actively setting for robust researches. Meanwhile, this dissertation also researches on earnings management and the sub-samples with the specific period and firm nature as the additional studies, to expand the positive corporate governance roles and mechanisms of independent director actively setting and independent director industry reputation.This dissertation has obtained the following conclusions:(1) Independent director actively setting has a limited corporate governance role, basically in the no effect state, and independent director industry reputation shows some positive corporate governance role.(2) There are indirect effects, namely both of them can significantly enhance the company's governance role of the proportion of independent directors and the board size.(3) Independent director actively setting and independent director industry reputation also have been mutually reinforcing the corporate governance roles each other.(4) However, both on earnings management fail to show the consistent and effective corporate governance roles.(5) After 2008, when the independent director system of listed companies is more perfect, in state-owned listed companies, independent director actively setting and indep endent director industry reputation show more significant positive corporate governance roles. Above all prove the existence of an active corporate governance role of independent director system of Chinese listed companies.Conclusions of this dissertation show that only actively setting the appropriate corporate governance system can effectively play more its appropriate corporate governance role; and the previous conclusions of the uselessness of the independent director system more likely stem from the large number of listed companies are only passively setting it to avoid penalties, so only actively setting independent director system can ensure its effectiveness. And, for state-owned listed companies, independent director system's actively setting will play a more significant positive corporate governance role. When setting the exogenous systems, regulatory authorities must more consider enhancing the initiative as they implement to ensure they can effectively play their due roles. For stakeholders, there will provide more scientific judgments for the corporate governance roles, based on actively setting of the system, for example, the actively setting degree of independent director system. Also provide a reference for Chinese state-owned enterprises to enhance their corporate governance system. |
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