Views On How To Establish & Develop The Apparatus Of Independent Directors

To enhance the function of the boards of the listed companies,CSRC issued the law to enlist independent directors. Based on investigating the current situation in China,this paper addresses a range of issues that may hinder an effective functioning of independent directors. Suggestions are made on three different levels-firm,industry and legal system to establish and develop the apparatus of independent directors in China. This paper consists of five chapters,the focuses of which are as follows. Chapter1 introduces the background of the idea of independent directors,clarifies the definition,function and other related elements. Chapter2,by drawing on the international best practices,we put forward suggestions on three different levels to discuss the various difficulties in establishing independent directors in China. Chapter3 focuses on how to ensure the independence,to motivate independent directors,to foster the culture of corporate governance. Chapter4 emphasizes how to develop qualified professionals,establish the Association of Independent Directors and appraisal system to review their performance,set up channels for inquiry and answer. Chapter5 discusses how to establish a legal framework,to improve the internal & external supervisory mechanisms of listed companies,which contribute to improving corporate governance in China.