Independent Director System In China

On the basis of discussing Independent- Director system in the common law system, this text mostly illustrates the concept , independence, right, obligations .and responsibilities of Independent-Director in China by the means of combination of the comparatively research and practically analyze ,and also, it discuss and analyze the existent problems of Independent-Director system in China, and comes up with the suggestions to wish to complete and improve Independent- Director system. The article includes 5 partsThe first part summarizes Independent- Director system. Beginning with researching the concept of Independent-Director, it analyzes the issue of the independence " of Independent-Director, then confirms the independence of Independent-Director ,fmally introduces how it forms and its developmentThe second part demonstrates rights, obligations , and responsibilities of Independent-Director .It state all the rights of Independent-Director in detail, including attend Meeting of board of directors and exert the right of vote, claim of reward, the right of realization and some extra rights as a Independent-Director. It discusses obligations of Independent-Director, besides the obligations of attention and its judgment standard. Writer consider that the standard should be stipulate according to the Independent-Director's professional construction and association which is used to judge the business. Independent-Director's responsibilities include the responsibilities to corporation and to the third part. When the Independent-Director have done their duty but brought damages to the corporation, should be free from the duty according to the rules of business judgment.The third part demonstrates application of Independent-Director system in China. This part analyzes the reason that China brings in Independent-Director system and summarizes its present conditions. Writer considers that the reasons are that the ownership is absent and the Board of supervisors is imperfect on system design etc.The forth part demonstrates the existential problems of the Independent-Director system in the present. The writer considers that the problems mostly lie in: thedifficulty to embody the independence; the superposition on function between the Independent-Director and the Board of supervisors; imperfection on right exertion institution; scarcity on the number of the Independent-Director; scarcity on the necessary institution of the constraint. This part analyzes and discusses these problems in experience also.The fifth part includes some suggestions of the Independent-Director system in China, and some relevant measures are proposed. The writer suggest that functions of the Independent-Director and the Board of supervisors should be defined, and the institution of election of the Independent-Director and its right exertion should be improved, at the same time, the institution of the constraint and the excitation should be established, at last, other interrelated systems (includes reducing the civil stock part, etc) should be established to increase the effect of the Independent-Director in the corporation's governance structure.