The Independence Of The Independent Directors Of Listed Companies And Their System Is Perfect,

As the core of the corporate governance, the board of directors plays a very important role in the corporate governance structure. Independent director system as one of the important corporate governance regulations and rules aims to ensure that independent directors of the company can monitor the management effectively. Independence is the basic attribute and the key character of independent directors, and the foundation of their authorities. Without it, independent directors will be worthless. Because the independent directors have no substantial relationship with the shareholders and managers of the company, they can exercise their functions and power fairly and objectively. Therefore, the introduction of independent director system is greatly beneficial to China listed companies. It will play an important role in overseeing the management, preventing controlling shareholders against the interests of the companies, strengthening the internal control and balance of the board of directors and safeguarding the interests of the companies and the small shareholders.This article takes the independent directors' independence as the objective of studying. It aims at improving China listed companies' corporate governance. In the article, I talked about the content and characteristic of independent directors' independence, compared the background and foundation of independent director system between China and US, analyzed the definition and rules in respect of the independent directors' independence of China listed companies and elaborated China independent director system's shortcomings and made some practical suggestions. The article divides into six parts.The introduction outlined the independent director system's development, summarized China independent director system's problems both in theory and practice. It explained the causes and significance of studying the independent directors' independence and the system. In the first part of the article body, I analyzed the concept of independent director and related concepts, and the content and characteristic of independent directors' independence. In the second part of the article body, firstly I introduced the American and China independent director system's development. Secondly, I compared the background and foundation of independent director system between China and US and pointed out that in essence the independent director system was a monitoring mechanism. Lastly, I discussed and analyzed the relationship between the independent director system and the Supervisory Committee system and put my own viewpoints. In the third part, I talked about and evaluated the definition and rules regarding the independent directors' independence of China listed companies and brought up some revision suggestions. In the fourth part, i took the view that an effective monitoring mechanism must have four basic conditions. In this part, i analyzed China independent director system's shortcomings and defects in the nomination and selection mechanisms, rights and duties and responsibilities mechanisms, incentive mechanisms, and the ability to perform their duties, and raised some practical improvement suggestions. In the ending part, i summarized the main viewpoints of the article and pointed out that the independence was the first and most important concern for us to build and improve china independent director system. Although the independent director system can never solve all the corporate governance problems of China listed companies, strengthening the research of the independent director system on the theory and practice aspects will promote independent director system and help realize its value, and improve the corporate governance's development of China listed companies.