Independent Director System In Listed Companies

To the world economy, a sound corporate governance is equally important to a strong country governance. ", which told by James , who is the president of the World Bank. He pointed out the significant role of sound corporate governance. And also, it is now widely recognized that the ineffective corporate governance leads to lots of problems existed in our Chinese listed corporate. How to enhance our corporate governance? For the most part, the use of independent directors by companies is one of a number of tools that is used to enhance the governance of companies.In this paper, I hope to provide an overview of the current two distinguishing corporate governance and make some observations about the current Chinese experience that may point to future developments in this important area. I hope that the information used and any observations made may provide a useful support to enhance the governance of Chinese companies through the use of independent directors.Also, I hope to explain the role of independent directors through several play game models. In the case of most of the listed company are majority of government ownership, which lead to the agent will infringe the interests of shareholders, as is explained in the several models before independent directors are appointed. Then we see that the legitimate interests of shareholders are protected through the use of independent directors, which is reflected in the last model.Finally, I want to give some suggestion to enhance Chinese independent directors regime, which based on the overview of the current American independent directors regime and the current legal and policy status of independent directors in china.I think one of the innovation of this paper is that I analyze the role of independent director in theory strictly by play game model, which is a inimitable way. The other innovation is the suggestion that I give to enhance our independent directors regime.