A Study On The Legal System Of Independent Directors In Listed Companies

Independent director system originated from America widely reference anddevelopment in many countries from the1990s. Independent director system isdesigned in China in2001, which curbs the concentration of Listed Companies, a highinternal control and oversight mechanisms and other damage behaviors of smallshareholders, forming an effective supervision and control effect on largeshareholders. After all, independent director system originated in the westerndeveloped countries. From the introduction of independent director system in Chinauntil now, the "localization" process is still being widely contested. Therefore, theresearch of independent director is necessary. According to the theoretical andempirical analysis of the results, we try to reform and improve the system ofindependent directors. Thereby establish an independent director of China’s nationalconditions for corporate governance, and promote the construction of modernenterprise system. In this article, we discuss the system of independent directors oflisted companies in China through both theoretical and empirical aspects.Chapter one attempts to analyze the modern enterprise system and corporategovernance problem. It also explores the introduction of the independent directors’mechanism. Based on the discussion of independent directors’ development process,analyze the concept of independent directors in use of three methods, which aregeneral type, type and general type and list-style together. And then analyze thetheoretical foundation of independent director system——Agency of trusting theoryand Relevant interest person theory.Chapter two research on the independent director system and development indifferent stages. In order to solve the principal-agent problem, to protect the interestsof small shareholders, to improve the listing Corporation governance pattern and thehealthy development of the capital market, many countries began to introduce anddevelopment the independent director system. And the discussion on the trend ofdevelopment and defects of the independent director system and its enlightenment to China though the analysis of the important independent director system failure event.Chapter three analyzes the current situation of the independent director’s systemof Chinese listed company and existing problem emphatically. The independentdirector set up in the listed company of our country, which is based on thecharacterized mechanism’s foundation of our country. From the first step to setting upan independent director system according to the laws of their status, the independentdirector system in China’s listed companies has an initial development process. Thispaper introduced the status of independent director system in China from theproportion of independent directors, remuneration and status, and trying to find someproblems for improvement.Chapter four try to make recommendations and proposals for improvement thesystem in China. First, we should improve the independent director’s selectivemechanism of Chinese listed company. I think we can try to adopt the nominationcommittee to nominate the suitable person to be the independent director, and set upexamination mechanism of independent director’s working performance at the sametime. Improve the independent director’s qualifications mechanism, set up the soundindependent director’s human resources pool, in order to guarantee the independentdirector’s independence. Pay attention to the independent director’s knowledgestructure and guarantee the independent director’s dynamic role. We should alsoestablish perfect term of office. Improve the independent director’s salary andencourage mechanism, especially improve the non-material incentive mechanism.What’s more, we will set up independent director’s liability insurance system andimprove the legal status of independent director.