Review Of Independent Director System In China

As a monitoring mechanism, the main function of Independent director system lies in supervising the management rights under the separation of ownership, to prevent internal control. Because it plays a good role in the process of corporate governance in developed countries, in order to improve our corporate governance model, we began to consider the introduction of independent director system during the 1990s. However, this system formally established in China nearly 10 years of time, the operating results of independent director system in China's listed companies are unsatisfactory, its basic obligations of faithful and diligence are not satisfactory, independence is difficult to maintain, many independent directors do not play the role of supervision and restriction. The purpose of this study is to explore the independent director system in China facing the dilemma whether the deficiencies in the system or the existence of insurmountable obstacles. The article uses the theoretical basis of independent directors system for the entry point, system described theoretical foundation for the survival of independent director system. In the Independent Director System of practical problems, the use of case studies, and the combination of theoretical and empirical methods, summarized the main form of practical problems. On this basis, the legal culture from the angle of the root causes of these problems. Finally, the proposed abolition of the recommendations of the independent director system, through the improvement of the supervisory board is more suited to national conditions to optimize the system of corporate governance in China.