Study On Practice Of Independent Director System

Based on the analysis of a large number of the existing literature, and combining with practical investigation, this dissertation gives an introduction of emergence and development of its history of the system of independent directors in China, at the same time, it analyzes and discusses some issues to be addressed, besides, it focuses on several problems of the more prominence currently, such as, the election of the independent directors, the guarantees of independence authority to exercise and the supervision of the independent directors, based on the analysis of the foreign existing system, combining with the current implementation of the system of independent directors in China, it proposes some remedial measures.There are five parts for the whole dissertation. The first part is foreword, which introduces the rising of the system of independent director across the world briefly. As the report shows that the functions of the board of directors declined constantly, for a timely the independent directors system emerged, western developed countries have been introduced the system of independent director to listed companies. The second part of the foreword introduces the emergence and development process of the system of independent director in China, which shows the introduction of independent director system in our country which is aimed to make up for the shortcomings of existing supervising mechanisms. China Securities Regulatory Commission issued an guidance on the establishment of independent directors in listed companies on August 16,2001. China's system of independent directors related to listed companies have been established.The first part of the main body of this dissertation analyzes the election of independent directors, for more importance, it analyzes two aspects, one is determining the quality of independent directors, for details, the current regulations on the selection of independent directors, which points out that the regulation is incomplete, such as the professional background of the staff serving in independent directors is inadequate, or it is lack of the restriction of age; the other is the nomination selection system, which pointed out the problem of unreasonable of it.In this part, the dissertation brings up several measures to remedy the system combining the analysis of the current system of foreign countries. Those are improving the system of qualification ensuring the interests of independent directors strictly, improving the selection mechanism of nomination, avoiding the right to vote in election, improving the electoral system, improving the proportion of the independent directors on the board, consummating the term of independent directors, and so on. The second part of this dissertation introduces the guarantees of independence of independent directors in China, conducted a brief analysis of the meaning of the independence of the independent directors, and pointed out that China's current system of independent directors to protect the independence of the weaknesses and the cause of such situations for several reasons. One of the reasons is that independent directors whose working hours in the company are limited. Secondly, the independent directors are lack of professional knowledge. The third reason is lack of the encouragement and the efficient operation of the pressure. In this dissertation, I propose several solutions in terms of the establishment of a sound incentive mechanism, improving the accountability of independent directors and improving the communication system to protect the independent director's right.In the third part of the main body, it introduces the authority to exercise of independent director in China. Based on my analysis, there are two reasons for why independent directors hardly exercise the authority, one of them is the defects of the system of meeting and resolution, which make independent directors can not contribute much more as they would like to, the other is that it is difficult for independent directors to call the company's resources to achieve their goals. Finally, it pointed out several measures for the protection of independent directors to exercise their authority, which including to complete the working system of independent directors, strengthen the competence of independent directors appropriately, improve the mechanism of the Board meeting further and strengthen the independent directors of listed companies to exercise the right to disclose terms of the mandatory condition appropriately.For the forth part of the main body introduced and analyzed the problems on supervision about the independent directors in China. In terms of the subject of supervising, it matters on two aspects, one is the government supervises deucedly, meanwhile, the self-regulatory organizations are lack of supervision; the other is each supervising unit has unclear division, which lead to serious supervisory vacuum and overlapping supervision.The final part of the dissertation analyzes the supervisory measures in terms of the accessing control supervision, the daily supervision and the departure control supervision. Furthermore, on the foundation of the analysis of foreign system and the current condition in China, this dissertation points out several problems which were included above and brings up a number of measures to make up for the defects.