The Exploration Of The Independent Director System Of Listed Company In China Based On International Convergence Of Corporate Governance

With the development of national economies and the global economy, the global environment, especially the financing environment has undergone major changes. It also attracted corporate governance changes. The different corporate governance model has increasingly demonstrated its inherent drawbacks, and begins to absorb other models'effective elements. The convergence and harmonization of international development trend is emerging.Independent Director System is one of the most important parts of corporate governance, which was produced in American in 1970s. The independent director system can improve the functions and structure of the board of directors, prevent the big shareholder from abusing the shareholding effectively, strengthen the transparency of the board of directors and guarantee the fairness of the board of directors, and thus get the result of balancing and supervising in power. According to the independent director system of foreign countries, the implementation and practice of this system are not long. It itself is at a stage of exploring and improving.Since 1990s, our country has introduced independent directors into the listed corporations. It is an effective way to establish scientific corporate governance, avoid insider control, and protect the interest of the minority shareholders, because the history tradition and purpose of introducing independent directors are different between china and western developed countries, the development and operation of the system is very particular in our country. Under the condition of big shareholders encroaching on country and minority shareholder's equity, it is a meaningful subject to take advantage of theory and practical experience of western developed countries to perfect the system of our country. The main subject of this paper is whether and how the independent directors system can finish its task. The solution of this problem will be significant to the implementation of the principle of fairness in china's security market, the improvement of the corporate governance system and shareholder's confidence on securities.Structure of the paper:This paper is divided into five chapters altogether. The structure and main points are listed as follow:Chapter 1:Prolegomenon. This chapter introduces the background to the study, research thinking, the main content, and some research about convergence of corporate governance and independent directors, which lay the foundation for later analysis.Chapter 2:The analysis, comparison and enlightenment about international convergence of corporate governance. This chapter introduces and compares two typical models of corporate governance, analyzing the "path dependence" and convergent, studying the global corporate governance reform's background, motives, main developments and converging trend in recent years, and discusses how to use global best practices as reference to further improve the corporate governance level of Chinese listed companies. The converging trend of global corporate governance requires Chinese companies to build up corporate governance mechanism that is compliant to market economy and global standards.Chapter 3:The example of international convergence of corporate governance: the establishment and perfection of independent director system. This part introduces independent director system's concept, generation and current situation and its role in corporate governance. On the basis of introduction, the chapter analyzes the development of independent directors abroad, and then put forward the force and resistance about independent director system in the international convergence.Chapter 4:The formation, status and problems about independent director system of Chinese listed companies. This part discusses the deficiencies of independent director system in our country. Since the foundation of independent director system, its weak points have already emerged during execution. For example, the independent director's independence is difficult to guarantee on qualifications, the asymmetry of rights, responsibilities and interests, personnel scarce and conflict with the board of supervisors and so on, and this chapter analyze its reasons about these issues from different perspectives.Chapter 5:Improve independent directors system to consummate corporate governance. In view of the status and problems of independent directors system in Chinese listed companies, this chapter puts forward a series of measures and recommendations from outside and inside construction, in order to benefit for corporate governance in our country.Viewpoints of this paper:1. The convergence of different corporate governance models. Globalization and the resulting competition promote the company's management to a higher efficiency model convergence to a certain extent. Although it would become the final agreement on corporate governance, scholars have different views. At least, different countries have a certain degree of corporate governance approaches from practice. However, due to the existence of complementary system and path dependence, as well as countries'differences in the economic, cultural, social and levels of development that determines the international convergence of corporate governance is relatively and gradually.2. The direction of convergence of corporate governance. The current corporate governance model has its strengths and weaknesses, therefore, the only best corporate governance model hardly exists. There are different models of corporate governance exist in reality which indicates that each model are shown effective, at least with regard to its specific environment, and other models would not exist for a long time. Hence, we can not be too superstitious to follow a pattern. Each model has its advantages, disadvantages and reasonable element. Corporate governance will not go to a single uniform model, but may be a mixed, two-way street. To the extent, the result of convergence of corporate governance could be a hybrid model which has other models'advantages and suits its own environment.3. The improvement of the independent directors system. The establishment and perfection of the independent directors system of listed companies is not only in favor of normal governance but also is favorable to improve the international image to facilitate and start the competition on a larger scale development in the international market. This paper tries to reveal the unique value of independent directors in corporate governance from the action principle, and reveals the problems of independent directors system of Chinese listed companies based on the comparison with the system abroad, and puts forward recommendations to improve the system. The perfection of independent directors system is not merely the legal problems, but system engineering related to many factors, thus we need to make efforts in many aspects. Therefore, the construction and perfection of the system of independent directors is hard and long.Contribution of this paper:1. The topic of the paper has novelty and realistic significance. From the perspective of international convergence of corporate governance of listed companies in China to study the independent directors system is a novelty.2. The analysis of international convergence of corporate governance from different perspectives such as accounting, economics and other aspects. Based on the comparison of the typical patterns of corporate governance, this paper reveals that corporate governance model is restricted by the "path dependence" and "system complementary", which means that the evolution of corporate governance can not be completely divorced from its original path. This determines that it is impossible to follow the same path among every country's corporate governance reforms, and the system complementary determines the convergence of corporate governance is a very difficult process. Consequently, the convergence is a relative, continuous development progress.