An Empirical Study On The Relationship Between Independent Director System And Financial Risk In Chinese Listed Company

In recent years, independent director system among corporate governance research has been attached more importance to monitor the company operation, thus to reach to the objective of protecting the investors through professional independent directors in the boardAccording to the domestic and foreign literature, scholars think whether the independent director system dose function well depend on whether it can promote the company performance, but the company performance is also affected by macroeconomics and economic cycle, research results vary widely. The article intend to explore the validity of independent director system from a new point of view of the financial riskFirstly, the dissertation expatiates on basic content and rights and responsibilities and the development process. Secondly, based on the qualitative analysis of relationship between independent director system and finance risk, the article makes further efforts to study the relationship with quantitative method and empirical method. The analysis is divided into two parts:based on the Z score model, the first part comes out by adopting the fisher discriminance and canonical discriminance to improve model of pre-warning of financial risk, so that it can be applied in Chinese listed companies. In the second part, factors influencing the independent director system can be concluded into domestic and international ones. In the context of them comes independent variable which goes into two tested models for empirical research. The result is that independent director proportion and financial independent director proportion are positively related to Z score and pass the test of significance.In the final, based on the result, the article puts forward suggestions on enterprise administration environment refinement, clarification of responsibilities between independent directors and board of supervisors, reformation of promotion mechanism of independent directors, foundation of nonprofit self-discipline intermediary organization and registered independent director, establishment of dual incentive regime and enhancing the proportion of independent directors.