Independent Director System In Listed Companies

The independent director system originates from the Common Law system countries. Transformed from the state-run companies, most of the listed companies in China are faced with a variety of barriers and dilemmas. For one thing, trustees or managers are performing in the state-run companies with the vacant trust; for another, other than the west share companies, the insiders take charge of the companies featured by strong administrative control and weak in ownership. Moreover, thanks to the complicated share structure, the current state of insiders controlling with a dominant shareholder becoming increasingly tense. Under such circumstance, it will be a theoretical focus to carry out innovations both in corporate governance and rules when introducing the independent directors system in China based on the present two-tier governance mode. It is necessary to borrow international advanced practices to establish the independent directors system in line with our concrete situation. This thesis concentrates on the necessity, the legal status, the definition and functions, the rights and duties, and rules and exemptions from penalty in terms of the introduction of the independent directors system and it also makes some proposals to the improvement of our current system.