Independent Director System For Listed Companies And Corporate Governance Structure

Introducing independent directors into the listed corporations 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 article is whether and how the independent directors system can finish its task.Firstly, proceeded with the definition of independent director, the article analyzes the origination and .development of independent director system in western developed countries and our country. Moreover, it proves the feasibility and necessity of the introduction of independent director system on theoretical base. Secondly, it demonstrates the validity of the system in our country at present by using positive research. The result shows that due to the influence of many subjective and practical factors, at this stage, independent director system does not take distinct effect on corporate governance, the promotion of corporate performance and the protection of interest of minority shareholders. Thirdly, the article discusses the reason of present conditions of independent director in our country from three different angles, that is, external corporate governance system, internal corporate governance system and independent director system. Finally, the article expounds the solutions to the feasibility of independent director system. These solutions involve the market system of independent director, the independence of all independent directors as a whole, the working environment and the incentive as well as the monitoring mechanisms. In addition, it studies the relationship between the independent directors and the board of the supervisors. It is possible for them to cooperate with each other and take their own effective effects on the corporate governance.Therefore, the research of the independent director on the corporategovernance can help us recognize the validity of independent director system in our country. Moreover, we should take advantage of various experiences of western developed countries to perfect the system of our country. 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.