Research On China's Independent Director System

Financial crisis in Asia in 1997,Modem U.S.Corporate Scandals like Enron and Worldcom in 2003 and the worldwide financial crisis caused by US subprime mortgage crisis in 2008,a problem about corporation govemance cannot escape from these phenomena.People now realize that the success or failure of corporation govemance is directly in relation to a country(area)'S fate.Independent directors system,which acts as an important role in modem corporation govemance structure,has regarded as a significant action to improve the structure and received high reputation since the system is emerged.In the practice of corporation govemance,independent directors have made great contributions to corporation govemance in restricting controlling shareholders and protecting the interests of small and medium shareholdersThrough some research methods,we firstly systemized the development history of independent directors system in the countries of Anglo—American Legal System,then in this paper the Chinese system was compared with Anglo—American Legal System and some other areas in view of regulations about independent director system in listed companies and some representative questions exist in implementing the system in China.Finally,we proposed some Policy—Based reform proposals for resolving above problemsThis paper consists of five pans,except preface,the main contents are as follow,After the part of preface,the second part defined the basic theory of independent directors system.This part first briefly introduced the concept, property and legal features of independent directors,then pointed out that the basic theories of study are"the separation of ownership and control""agency by mandate"and"information asymmetry".The third part we reviewed the history of independent directors system in the countries of Anglo—American Legal System and Korea and Hong Kong,China. Through the review,we found out that one important philosophy reflected by the generating process of independent directors system is strengthening internal control.The forth part provided some legislations and regulations related to independent directors at present in China.After study these regulations,we discovered that a lot of irrational rules and regulations still existed.The fifth part analyzed the deficiencies existed in our independent directors system.The deficiencies are mainly included the defective circumstances of external corporation governance,imperfect structures of internal corporation governance and the self-deficiency of independent directors.In the sixth part,the paper provided several methods to improve the independent director system in listed companies in China.The measures touched on legal politics,line management,external governance circumstances and internal governance structures.