Studies On The Independent Director System Of China

Capital market plays a key role in modern society. Now, after China's entering WTO, not a small amount of capital has flooded into Chinese market, which gave this market a big blow. Therefore, in order to improve competitiveness of listed company, the independent director system has been introduced formally in China, hoping to perfect the structure of listed company to keep its function in order.The new company law, which has been used formally in January 1,2006, has added some stipulations about the independent director system in its term 123. Consequently, the independent director has its own guarantees legislatively. However, from the practical perspective, the so called independent director system is, actually, nothing but a shell, without any effect in a short time. This is partly due to the fact that this system has not really been independent at all, which can also be described as the deficiency of independent director system.Independence is not only a key but also a foundation of this system, which is also the reason why this system has some superiority in supervising and administering. Only this system is really independent from a steady flow of complications inside company can it plays its function in an unattached and impartial way, which can also help director monitor these substantial shareholders and protect the interest of another juniors. Meanwhile, the independent director will not be allowed to take any other position, what's more, the independence of appointing or removing director must be required strictly further, only in this way can we prevent somebody from controlling situation for his or her own profits and ensure the conditionality and superintendence. This thesis emphasizes the importance of independent director system, analysis's the meaning of independence and put forward some further suggestions on how to ensure independence of this system according to my studies on international system, the specialty of China's listed companies, the present situation of independence in China and the background of national conditions.The thesis can be divided into 4 parts:Part 1:Outline, meaning and significance of independent director system.Part 2:The foreign indemnificatory regulations about this system, including some explanations on how this system generated and how it has developed with some devises on how to protect its independence effectively.Part 3:Studies on present situation and existing problems of independent director system, in which the main problems that existed were, pointed out in this part as well.Part 4:Suggestions on how to perfect the independent director system, especially given some plans from the point of independent director's qualification, the power they have, encouraging politics and some restriction politics.