The Study Of Independent Director System In US Investment Funds

Investment funds are important tools for people in the United States to save and invest. America boasts the funds markets of the most varieties, large scale and full functions of the world. The reason why America investment funds trade can be developed and regarded as the main power is the intimate cooperation between perfect legal framework and independence director system. Part one ──The connotation, formation and evolution of independence director system. Independence director can independent of the stratum of supervisor. He may judge the commerce relation independence without any strong impact from the company, beside collection of charges and holding stock. The most characteristic of independence director is "independence". The definition of independent director are various from the Groups, including Securities and Exchange Commission(SEC), America jurisprudential study institute, National Advisory Committee on Director(NACD),but all of them believe that the association between independence director and the company is not Significant. So independence is the most important characteristic of independence director. Besides obligatory duties, the independence directors still have some extra ones. 1,He will help the directorate to assure that the benefit which they take into account belongs to all partners. 2,He does the judge of corporate strategy, outstanding achievement, resource etc by himself. 3,He often reviews the work of directorate and board of executive directors. 4,He intervenes in affairs of board of executive directors in time when they didn't agree with each other. In respect of expressing opinion of independence, helping to make strategy of commerce, supervising managers, communicating with others and increasing outstanding achievement they do the excellence job. Independence director stems from outside director who come into being from the forepart of 20th century in America. But the real independence director system come of 1960's and prevail in America, Britain and France in 1980's.Independence director is in great consequence of directorate and has been greater in nowadays. At the present time the institutions and organizations of most countries in the world have carried independence director system into execution actively. And most of them regarded organizing independence director system as a vital measure of consummating the mechanics of management of the company. Operational mechanisms of independence director system :1,mechanism of selecting independence director; 2,the scale of independence director in directorate; 3,invigorative mechanisms independence director system ;4,the problem of reward of independence director. These systems work independence director system to rule. Part two ──The genesis and development of independence director system of investment funds. Investment funds come of Britain, but have rapid development in America and spread to main developed country from there. One of the outstanding features of independence director system has played an important role in the course of operation of funds. Most of investment funds in America are in the form of corporation. It is composed by three parts : loan society,close funds and investment trust. In the view of a comprehensive survey, it went through three parts of development :1,In 1940s, it came into being ; 2,Form 1960s to 1970s, it became strongly; 3,Since 1990s, it has been development . The situation of investment funds in America has a series of new changes, With the influence of external economy condition especially domestic economic depression After 2000.The scale and number of asserts still increase, but the speed of increasing has become more slow than 1990s obviously. Besides, investment portfolio began to slow down .Stock funds no longer plays the leading role. So, in order to bring independence director into better play, SCE promulgate a couple of regulations to enhance independence and effectiveness of them. The rules include: 1,The proportion of independence director is no less than two over three in directorate. 2,Counselor of investment funds, the former topside of distribution department and correlative department can not assume the office of independence director. 3,Independence directors are appointed by the predecessor. Independence director should hold a meeting by himself when it is required. Part three ──How independence director system could run.1,The problem of characteristic of independence in independence director system. Along with common fund coming to maturity,independence director system has several changes so the independence director has more power and the system is more perfect. The independence of the system can be embodied by the composing of directorate, the competence for a post of independence director , the process of election and the like.2,What is the duty and effect of the independence director? As a means of embodying the independence, In America, independence director must be irrelative to any others. But, as a member of directorates, independence director has the same droits as others. In the meanwhile , independence director has the privilege given by the law .The effect of the independence director will stand out when the conflict of interest is come forth .3,The structure of independence director system.