The Independent Directors Of The Sino-US "independence" Is Defined In The Comparative Study

On the application of Comparison Method to the differences of definition of Independent Director between China and America, we can see the differences of corporate governance between the two countries. What this article concern and research is the relevance of definition of independent and corporate governance. In U.S., the single BOD structure, diversified shareholder structure and developed capital market cultivated its independent director system. The independent director, as a kind of outside supervision, was built-in the corporate governance. Its main deputy is to prevent the large manager from occupying small shareholder's interest. And regarding the common situation of big-power-manager versus small-power-shareholder, the related U.S. regulation emphasizes the candidates of independent director's relationship with managers. As for China, the independent director mechanism was introduced because of the failure of Board of supervisors. But highly concentrated shareholder structure, the evolution from government-dictated governance to economic governance, and immature capital market, pushed the regulators more underlined the importance of independent director, and asked them to be independent from managers as well as large shareholders. The combined action of internal governance structure and external governance environment decides the definition of Independent Directors. Therefore, there is no generally established standard of independence, and the change of Corporate Governance will call for a change of the definition of independence.