The Study On The System And Executive Power Of The Company's Independent Director

Being viewed as a curb on the rampant top mangement and majority stock-holders encroachment on minority stock-holders, independent director system has been introduced into some public companies in China since 1990's. However, with the controling share being kept in the hands of state government or institutional shareholders, independent directors find that they are actually underplayed roles in boardrooms and their confined atonomy and monitoring function can not stop some majority stockholders from engaging in self-interest serving and infringing minority stokholders'interests. In this context, it is of great importance to set up a sharpened system that is essential for independent director to work effectively and may hence lead to better board performance.Based on some relevent theories, this paper reviews the independent director system which have been fashined into effective insider control tools in some western countries, empirically examines the development and present situation of independent director system in China, presents some measures that may help China public companies put a well-functioning independent director system in place. The arsenal contains reinforced base for independent director system, balanced liability of independent directors, rational appointment and disengagement of independent directors, incentive machanism, professionalization of independent directors, independent directors'positive role in corporation governance.The paper is organised as follows. Section 1 introduces the therotical backgrond for independent director system and the development and updates of this system. Section 2 indicates how the independent director system performs in China and identifies some problems blocking the way to boost our independent directors'executive force in monitoring management activities, followed by a discussion and conclusion in Section 3 which puts forward some measures and mechanisms that may help independent directors better contribute to the corporation governance.