Study On The Independence Of Independent Director And The System Improvement Of China

The independence is the core of independent director system. Therefore, we should pay attention to the independence issue in order to design independent director system.Why should we introduce independent director system? As for the cause, the structure of contemporary China listed company lacks of supervision power that is the board of supervisors can not perform supervisory functions,hereby causing the internal function unbalance. This phenomenon is particularly apparent in the listed companies. China faces to the problems of corporate governance.Then, wether the independent director system which is transplanted from the common law is suit to our country or not? The author adapts the historical research method to research the independent director system. Here takes a look into the difference of the independent director system between Common-Law System with the representatives of UK and US and Civil-Law System with the representatives of German and Japan. The independent director system is the inevitable outcome from a yuan of business management mode of common law countries,as the same time It is a beneficial supplement of supervision power to two yuan of business management mode in mainland country.Our independent director is regarded as standing in the third person impartial, independent to judgment, thus to maintain long-term t interests of the listed company and protect the interests of small shareholders. The independent director system of our country has imposed already. But the phenomenon of alone big" is particularly serious in the listed companies in China,. The independent directors can not truly independ from director board. This is because the production mechanism of the independent director is not perfect; lack of incentive constraint mechanism of independent directors, and relationship between independent directors and the board of supervisors of a company is not clear. According to the generation mechanism of independent directors in our country, the incentive constraint mechanism of independent directors as well as the relationship between the independent directors and the board of supervisors,the author tries to definy the independence of independent directors and explore why the independent director can not independ from director board in our country. And based on those,the author advices some suggestions to maintain independence of independent directors.