On The Perfection Of Independent Director System And The Corporate Governance Structure In China

The important subject in enterprise's legal system how to perfect corporate governance structure in our country has been paid close attention to all the time. As a significant measure of perfecting listing company's corporate governance structure in our country, the independent director come in to being by the CSRC (China Securities Regulatory Commission) 's mandatory request. The independent director's system originated from Great Britain and America. It has been playing an important role in Common Law system. Our country founded corporate governance model by imitating the countries of Civil Law system in the past and introduced the independent director's system these days. The introduction has caused a lot of questions that is worth discussing on theory and practice at present. At the same time many people give their attention to the system with strong hope that it can supply a gap in corporate governance structure in our country. So perfecting corporate governance structure becomes the main function of the independent director's system. It is also " the most convincing theory view " for the people who back the system. But I think the independent director's system will not play an expectant part in the perfection of corporate governance structure in the future. This text will be divided into four parts to dissert.The first part outlines independent director's system and introduces its concept, generation and current situation. The original intention of setting up independent director's system should be well-meaning. And it is helpful at present, such as preventing shifting assets, prescribing related business, making beneficial suggestions on the company's management, protecting the rights and interests of the medium and small stockholders, etc. But it is very difficult for independent director's system to function in China for various reasons.The second part discusses the deficiencies of independent director's system in our country. Since the independent director's system was set up, its weak points havealready emerged during execution. For example, the independent director's independence is difficult to guarantee on qualifications, selecting mechanism and exercising authorities; It is indubitable that the independent director's system and the board of supervisors have conflicts at the present time; Corporate governance culture and the degree of business society is not fit for the development of independent director's system either. Thus to the above problems many people put forward some suggestions which will still taken time to implement and the result is unknown.The third part, which analyses the inbred and inevitable defects of independent director's system, is the core of the text. And the involved problems, such as limited time and energy of independent directors, dilemma in obtaining salary, structural bias, easy to be protectors of administrant, contradictions between protecting company's secret and working, are difficult to solve. We could understand the negative effects of independent director's system from these aspects.The fourth part makes some suggestion about the perfection of board of supervisors by our expectation on its functions. It oppugns the independent director's system and pointed out how to perfect Chinese corporate governance structure by strengthening the functions and powers of board of supervisors without adopting the independent director's system at the same time, including expanding authority of board of supervisors, perfecting the legal capacity to sue of board of supervisors, setting up outside supervisors, etc.In a word, according to our country's condition, the independent director's system will not play an anticipated role in the perfection of corporate governance structure in the long run. It is just a temporary measure against many unconventional conditions at present. So we should not put too much time and energy on the foundation of independent director's system. The author does not agree to establish this system from legal aspect either. Setting up this system is an adminis...