Study Of The Independent Director System

Independent director system came into being in 1930s in America and in the late of 1980s boards of directors in most corporations of Britain and America were mainly composed of independent exterior director. With the booming of corporation management around the world, independent director system was transplanted to all over the countries gradually, including some civil law countries of European which adopted the double layer system corporation management structure at first, southeast Asia countries and districts.Independent director system originated from failure of earlier corporation management, especially malfunction of board of directors. In order to solve the problem of bad supervision to manager and non-independence of board of directors, many countries began to adopt independent director system to adjust corporation management structure.As a new system around the world, independent director system has played a positive role in corporation management. However, there are still many problems, for example, some regulations are not in full operation, directors are not smooth to attain comprehensive, objective and exact information, independent director are not independent and his supervision rule are not in full exertion .The occurrence of An-Jan accident revealed these problems widely.With regard to practice of corporation management around the world and purpose of establishing independent director system, the standard of "independence" in independent director system should be: independent director is independent of corporation, manager and main shareholders of corporation;main functions of independent director are strategy decision, supervision and assessment;and his basic duties are to be careful and faithful. In order to exert the function of independent director, reasonable and effective encouraging and protective mechanism for independent director to exercise his functions and powers shall be established.In order to solve the problem of shareholding structure of "one big shareholder" result since 1990s, independent director system was introduced gradually in China. This system played a positive role in improving corporation management structure in the past years.However, there are still many problems, such as definition of trade relationship, service relationship and relative relationship not being precise;design of responsibilities not being reasonable and encouragement and protection mechanism not perfect.Every system will undergo a process to practice and improve .In order to exert the functions of independent director system in corporation management, following aspects should be paid more attention: dealing with the relationship of independent director and supervisory board appropriately, establishing and improving selection mechanism, encouragement mechanism, duty and responsibility mechanism and protection mechanism of independent director, improving special committee of independent director and establishing industry association of independent director.Independent director system is transplanted for the purpose of reforming corporation management structure in China. We should judge this system with an objective attitude. Independent director system will exert functions it has through gradual improvements and practice.