On The Standard Of Diligence Of Independent Directors

Independent director system originates in Euro-American countries where unified system corporate governance mode prevail. These countries guard against administration authorities hollow the company through setting independent director in the board. A lot of problem like supervision lack, insider control and board of supervisors lose effectiveness arise in1990s. For solving these problems independent director system was introduced into china drawing lessons from experience in company govern of Euro-American counties.Duty of diligence means director shall act like a kindhearted administrator when take care of company affairs. The core part of this concept lies in the standard of diligence. A definite standard of diligence can not only guide the act of director but can serve as a rule in juridical practice as well.As a director the independent director bear the duty of diligence naturally. Meanwhile since there are distinction like role, work manner and work time between independent director and inside director their standard of diligence duty shall be different. Because independent director system is not perfect in china nowadays, we shall not introduce the foreign standard without enhancement.Therefore this text tries to definite the general standard and specified standard of independent director’s diligence duty through study in china’s independent director state and distinction between independent director and inside director, and tries to make the suggestion in legislation and institutional improvement. Follow these ideas the text is divided into four chapters except the foreword and epilogue:Chapter one discuss the diligence duty of director briefly making a foundation of the following discussion of diligence duty of China’s independent director.Chapter introduce the origin of the independent director system, origin intention of introducing the independent director system into china and the role of which in detail. Afterwards the text summaries that standards of independent director’s and inside director’diligence duty shall be different through comparing.Chapter three specifies the general and specified standard of diligence duty of independent director with consider of china’s independent director system develop state. Chapter four analysis the deficiency of diligence duty of china’s independent director in legislation and practice and make the interrelated suggestion.