Study On The Current Status Of The Chinese Independent Director System

Independent director system has been introduced into our country to monitor major shareholders and insiders control. Being more independent, the board would act for the interests of all stakeholders. On August 16, 2001, CSRC (China Securities Regulatory Commission) issued "Guideline for Establishing the Independent Director System of Listed Companies". Since then, it has developed fast in our country. This thesis will investigate the current status of the independent director system in our country.In the study, we compute descriptive statistics about the system based on the data of year 2003 of the companies listed on Shanghai Stock Exchange, and carry out contrastive analysis of compensation of 2003, 2002 and 2001. The results show that the number of independent directors has largely increased, the independent directors have become younger, and their compensation has increased. After farther analysis, we also find that the independent director system is still at its developing stage in our country, and its implementation was driven mainly by policies, not the market.Presence of independent directors itself cannot ensure that the board would work effectively. Without proper prerequisite and condition, the independent director system is just a useless form. In conclusion, I argue that establishing and developing the independent director system adapted to our listed companies is a hard work, and the authorities, the society, the companies, the independent directors themselves should strive together for its success.