The Study On The Improvement Of Independent Director System In China

The independent director system which originated from the United States ofAmerica has its unique advantages in corporate governance.Then,it has been adoptedby many countries and regions.Thus it has led to a revolution of independentdirectors system.China which locates on the other side of the ocean is in the earlytime of the market economy and the capital markets and faces many problems,suchas illogical ownership structure,Dereliction of duty of board of director andsupervisors.All this problems above all make legislators can not do anything.Indesperation,legislators begin to explore new methods abroad and expect to behelpful.So,they begin to consider the independent director system.Then,theindependent director system was introduced into China as an exotic.However,itdose not play the role which the legislators expected,and more become a vase-likeornaments and Christmas decorations,and exists in name only. Why this happens,Whether it is necessary that legislators introduced the independent director system.Ifnecessary, how to let it shine.This is the main objective and implication of theresearch.This paper uses the cause analysis, comparative analysis and empirical researchmethod. First of all,by analyzing the origin and development of the independentdirector system and the motivation of Chinese legislators`introducing it, all thatused to illustrate the necessity of independent director system. While independentdirector system has been brilliant in world capital markets, China’s capital marketsfaced many problems.To balance the controlling shareholders,legislators design thesystem of board of directors and supervisors both failed, which caused kinds ofconsequences, so we have to seek legal transplant path, then we introduce theindependent director system.Through the empirical research method,we analyze theactual effectiveness of the independent director system in China. A conclusion has been come to: the independent director system in China dose not play the role whichthe legislators expected,and become a vase-like ornaments. Then using causeanalysis method to analyze the reason why this happened,which provides thereference and guidance for localization path of the independent director system inChina.Except find reasons from itself to improve a legal systems, a more viable way is toabsorb advanced foreign experience.So in the forth chapter of this essay, it isexplained about unitary pattern and dual management structure by comparison andanalysis. independent director system comes from unitary pattern, while in China,the pattern is dual management structure with the board of directors and the board ofsupervisors, which is one of the reasons why independent director system cannotplay a role as important as it should be. Afterwards, this essay analyzed the companymanagement practice in German and Japan, where company management structuresare both dual management.both country in the corporate governance practice has aimportant reference significance respect to our country,which also provides anotherperspective reference and guidance for localization path of the independent directorsystem in China.Based on the above analysis and research,let`s analyze improvement of theindependent director system in China.Even more theoretical and practicalsignificance then before,also more necessary.To make the exotic have certaininfluence that legislators expected, we must improve it.By reason analysis andempirical analysis method we can Draw some conclusions: Firstly, legislators needto reform and improvement the independent director system from the system.Inorder to solve the problem between independent directors`and board of supervisors`powers overlapping，but also to improve the system construction. Second,we needthe efforts of all sides to jointly improve the appointment and the nominationsystem.In order to ensure the independence of the independent directors from theinitial, while ensuring the professional.Third, legislators need to improve interestincentive mechanism, and adopt the combination method of regular salary and otherincentives.To ensure the independency and non-dependent of the independentdirectors perform function. Fourth,legislators need to improve responsibility and authority security system of the independent directors.To ensure the independentdirectors can perform function securely and efficiently.