| Independent director system is a system through the establishment of independent directors on the board to form a balance of powers and oversight.On August 16,2001,the CSRC(China Securities Regulatory Commission)promulgated"Guidance on Establishing Independent Director System in Listed Companies",putting forward clearly that the listed companies should establish the independent director system.The guidance stipulates that "the independent director of the listed company is the director whom does not hold other positions in addition to the board of directors,and there must be no connections between the company,the major shareholders and the independent directors that could hamper their independent and objective judgmen".Therefore,the "Independence" and "Professionalism" constitute the fundamental elements of independent directors.As for Independence,Jiang and Murphy(2007)pointed that compared with other independent directors,scholars are less likely to be associated with insiders of the company;at the same time,because the scholars have a higher reputation,they are more likely to form their own thinking and judgment,and are less influenced by others,which to some extent ensure the independence.As for Professionalism,there are 86.88%of scholar-independent directors are professors,besides 2.52 percent of them have the academic title"Chinese Academy of Sciences" or "Chinese Academy of Engineering".This shows that the scholar-independent director is not only a particular academic experts in the field,but also have a high influence or knowledge in their area.Theoretically,scholars in universities should be the best candidate of independent directors.Realistically,the statistics results of the independent directors’occupational background on Chinese A-share market from 2002 to 2013 show that:scholar-independent directors from universities,party school and research institutions account for as high as 43.50%,which is the most important part of independent directors.The proportion of A-share listed companies which have at least one scholar-independent directors is between 0.7115 and 0.8105,with an average of 77.99%;the proportion of scholar-independent directors in A-share listed companies which have at least one scholar-independent director is between 0.5319 and 0.6715,with an average of 56.09%.Thus,hired scholars as independent director of listed companies is a reasonable choice both from the perspective of theory and practice.However,only a little literature focuses on the academic background of independent directors,including Tang et al.(2005),Wei et al.(2007),Zhao et al.(2008),Tang and Ma(2012)etc.These studies,mainly conducted at early stage of the independent director system,simply add the ratio of independent directors on board in the regression as an additional control variable,without distinguishing individual characteristics between these independent directors at detail,and fail to research similar conclusion.Some of scholars overseas have paid more attention on independent directors’ academic background,such as Audretsch and Lehmann(2006),White et al.(2014),Francis et al.(2014),etc.To further clarify the influence of independent director system in Chinese corporate governance,this paper attempts to discuss the following issues from the view of independent directors’ academic background:(1)Who takes the role of(scholar)independent director?(2)What factors affect the listed companies to hire scholars as independent directors?(3)How does multi-board independent director with academic background assign their effort?(4)How does the governance performance of independent directors with academic background?(5)Whether the violation of independent directors with academic background suffer more severe market punishment?The results showed that:(1)From a perspective of professional background,scholar independent directors are more focused on the field of accounting,economic and management,who have some management skills.As for the place of origin,the scholar-independent directors are mainly from Zhejiang,Jiangsu,Shandong,Hunan and other provinces with relatively higher level of economic or education.From the view of workplace,Beijing,Shanghai and Guangdong,are the most important areas where the scholar-independent directors are selected from.Further,scholars work in Renmin University of China,Tsinghua University,Shanghai University of Finance and Economics,Peking University and Xiamen University held the most independent director position.From the view of academic titles,there are 86.66%of scholar-independent directors are professors,besides 2.52 percent of them have the academic title "Chinese Academy of Sciences" or "Chinese Academy of Engineering",which implied a high influence.As about the education level,more than half of the scholar-independent directors(59.33%)have PhD degree,showing a strong learning ability.And most of the scholar-independent directors graduated from Shanghai University of Finance and Economics,Renmin University of China,Peking University,Zhongnan University of Economics and Law and Xiamen University.As for age,the majority of the scholar independent directors between 40 and 59 years old.From the view of constellation,the number of scholar independent directors from Aries,Gemini and Aquarius are least,and from Virgo,Scorpio,Libra are most.As for the distance between scholar independent directors and listed company’s headquarters,coastal areas such as Beijing,Shandong,Jiangsu and Shanghai are nearest,western region such as Xinjiang,Tibet and Qinghai are farest.(2)From the point of supply,the more numbers of colleges and universities(faculties or teaching staffs)in a district,the higher possibility that listed firms will employ scholars as independent directors;From the point of demand,the higher business complexity,the more intense competition in the industry,the stronger growth ability of the listed company,the higher possibility that listed firms will employ scholars as independent directors.In addition,the motivation of listed companies to hire scholars as independent director is also due to the firm size and ownership properties.(3)The multiple-board scholar independent directors do have preference in their energy distribution.Specifically,the scholar independent director will distribute more energy to the companies which have the higher reputation,the relatively close geographical distance,the relatively lower cost of traffic and more convenient transportation.When the distance is far or the age of scholar-independent directors is older,the discrimination is more obvious.The multiple-board scholar-independent director are more likely to leave the relatively lower reputation and farther firms according to the deterioration of accounting(market)performance,even though they are not reach the dual date.(4)On the supervision of the capital occupancy of large shareholders,scholar independent directors play a better role in corporate governance;On the supervision of the rationality of CEO compensation,scholar independent directors play a limited role;On the supervision of violations of the enterprise,only independent directors from 985 or 211 project perform better.In addition,the governance effect of independent directors with academic background may also be affected by the distance and the property nature of the firm.(5)The violation of independent directors with academic background suffer more severe market punishment.Specifically,when the independent directors suffered from penalties in the process of the case of listed company’s information disclosure violations,the market reaction is more negative when the punishment list including independent director with academic background.At the same time,compared with the non-scholar-independent directors,before and after the announcement date of the punishment,in a short period,the stock price of other listed companies in which the independent director with academic background have held office dropped obviously.The punishment of independent directors with academic background has an impact on the candidate of the same university to some extent,and shows negative spillover effects.Overall,these results show that compared with independent directors with other backgrounds,scholar independent directors have certain advantages in expertise,education background,age,relationship networks and so on;multiple-board scholar independent directors allocate time and effort according to the cost-benefit principle;compared with other independent directors,scholar independent directors perform better in supervising the capital occupancy of large shareholders and violations of the enterprise;due to the higher sense of identity and social expectations,the violation of independent directors with academic background suffer more severe market punishment.This paper maybe makes the following contributions:First,the comprehensively and detailedly research on the individual characteristics of independent directors contributes to a better understanding of distribution of independent directors.Second,the deeply investigation of scholar independent directors’ energy allocation contributes to a better understanding of the behavioral characteristics of multiple-board independent directors.Third,the systematicly examination of the government performance of independent directors with academic background provide the reference to understand the function of independent directors.Fourth,provide new evidence to the different market reaction on corporate violations. |
