Thinking About The Legislation Of The Independent Director System In China

In China, the independent director system has been came into effect for four years since the "the guidance of making up the independent director system in the listed company" has been promulgated by the Chinese Securities Regulatory Commission (CSRC) in August 16, 2001. During these four years, we should be more ration, realize the using of this has many unsatisfactory aspects, and still has not achieved the prospective effect in our country. So I table proposals to the system in this article. I hope the independent director system can be improved to improve the company govern.Because the independent director system was derived from England and the United States, so I expound it from its background first. The independent director system first appeared from the "investment company law of 1940" of the United States. It was established for preventing the company being controlled by the internals, began with 60^th to 70^thof 20 century. It was a sign of the independent of the board of directors and the reasonable of corporate direct. The practice verified that it make the decision-making of the board of directors more scientific, safe and efficiency, improve the competitiveness, prevent the internals control etc.The independent directors system was also very necessary for our country. It can prevent the biggest shareholder to control the board ofdirectors, and can improve the accounting information's qualification. In these years, the CSRC announced many documents about it, and modified it continually. But the background, mode of company govern, equity structure are different between using the system in China and other countries.The system using in China still has many law problems, for example, it can not confirm the align of the independent directors, can not achieve the effect, its responsibility like the board of inspectors partly, law responsibility are not defined, no law of its responsibility insurance etc. Aim for these problems, I want to table these legislation suggestion as below:Resolve the same responsibility between the independent director and the board of inspectors.Search out a good frame of the independent directors and the internal directors.The independent directors not only need independence, but also need knowledge and experience for this work.The independent directors should be voted by the small investors and stand for the benefits of them.The independent directors should undertake the relative duty if they violate the allegiance and assiduity obligation which they need to obey.Establish the encouragement mechanism for the independent directors.The independent director should perform its duty through excellent personality and ability.Establish the insurance mechanism for the independent directors.