Reflections On Perfecting China 's Independent Director System

Independent director system is beginning from United States in the1930s, whichis an important means of the corporate governance of America. Later, this systemwas widely used by more and more countries in the world. To protect the interests ofminority shareholders and prevent insider control, China introduced the independentdirector system in1990s. However, from the development of the nearly twenty years,even though the related departments of our country constantly release someregulations, and the independent director system has been established in the listedcompanies, but its effect cannot be evaluated good. Especially under the poorsupervision of the board of supervisors, which once led questions. Even someonethink, either of the independent director and supervision committee is enough.According to this, the writer, starting from the conditions of our country, reviews andidentifies the establishment of independent director to make the system morereasonable and feasible, which has an important significance to promote the corporategovernance, protect the interests of minority shareholders and build a goodenvironment of market.This paper consists of three parts. Chapter One details the theoretical foundationof the independent director. First is the introduction of the connotation andbackground knowledge of independent director system. And then the writer analyzesthe theory of the principal-agent theory and the independent directors, finallycompares the function differences between the two mode of corporate governance. InChapter Two, the writer first mainly introduces the implementation status from thetwo aspects of legislation situation and implementation effect to conclude that theconstruction of the independent director system in China is at the beginning ofproductive, but a long way to go. Then this part explains the restrictive reasons on thedevelopment of the system from the its own operation mechanism, corporategovernance structure and external governance environment. Chapter Three is thefocus of this paper, which puts forward the corresponding proposal and the systemdesign to make it become more perfect, from analyzing the exit mechanism of theindependent director office to strengthen all aspects of corporate governance culture.