Relevance Analysis Of The Characteristics Of Independent Directors And IPO Initial Assessment Of Companies In China

IPO is a process that enterprises with good projects publicly sell shares and raise funds to the market potential investors for the first time with the help of investment banks and other agencies. There are many drawbacks in the security market in China, because it is not the product of natural evolution from commodity economy, Lots of examples exist that listed companies make use of information asymmetry to undermine the interests of investors in order for misappropriation, and it is too difficult to evaluate IPO companies for investors.At this time, it becomes critical for the presence of an independent director as a corporate supervisor. An independent director is a director who is independent of the company, major shareholders, and operators. The independence of independent directors makes it better for IPO companies to play a supervisory role and reduce information asymmetry, so the market makes a positive assessment.,The research abroad, which has achieved fruitful results, mainly think that the identity and influence of independent directors will affect the initial evaluation of an IPO company, but relevant study in China is very few, and the research in independent directors is mostly focused on the relationship between the proportion of independent directors and corporate performance and profit management. Therefore, the significance of this thesis is to make up for the blank in relevance research of the characteristic of independent directors and initial evaluation of IPO companies in China, and provide advice for improving the independent director system in China, enhancing corporate financing capability, and help investors select excellent IPO companies.Based on principal-agent theory and selecting IPO companies in 2005-2008 as the research sample, this thesis makes analysis and assumptions, and conducts research on the correlation between characteristics of independent directors and initial evaluation of IPO companies in China by way of descriptive statistics analysis, correlation analysis, and multiple regression analysis.The principal-agent theory suggests that companies should separate the ownership and management. The owner reserves the residual claim and gives the residual control rights to others.At the same time, the principal-agent theory believes that people are rational, and the agent may damage the interests of clients for his/her own sake using information asymmetry. In this case, the post of independent director should be established as a supervisor to operators and inside directors, thereby reducing the internal control and protecting the majority of shareholders, especially the medium and small shareholders. This thesis assumes the following: There is correlation among the competence of independent directors, their experience, the number of independent directors that companies appoint voluntarily, the influence of independent directors, and initial evaluation of IPO companies.The thesis draws the following conclusions: The legal background and influence of independent directors are positively correlated with the bargaining power of IPO companies with underwriter; The number of independent directors that companies appoint voluntarily is negatively correlated with the bargaining power of IPO companies with underwriter; The financial background and influence of independent directors and their experience are positively correlated with investors'evaluation of IPO companies; The number of independent directors that companies appoint voluntarily is negatively correlated with investors'evaluation of IPO companies; The financial background of independent directors and their experience are positively correlated with the early profit of IPO companies; The number of independent directors that companies appoint voluntarily is negatively correlated with the early profit of IPO companies; There is no significant correlation among the management background and (associate) professor background of independent directors, selling price of IPO companies, investors'evaluation of IPO companies, and the early profit of IPO companies. Finally, based on the above conclusions, the following recommendation are proposed: The government should raise the required minimum number and detail the qualification of independent directors; The IPO companies should appoint independent directors with different backgrounds based on different needs, at the same time, preventing the team younger; By interpreting the professional background, age, number, and influence of independent directors, investors can analyze the existence of serious information asymmetry in companies.