Consummation Of The Appoinment And Dismissal System Of Independent Directors

Independent director system originated in America.It has a significant effect onU.S. Corporate Governance. Lots of Common law countries and Civil law countriesalso set up this system for their Corporate Governance.Independent director systemwas introduced officially by China Securities Regulatory Commission in2001.Thefunction of the independent director system of our country was not ideal in the pastyears. Independence is the soul of the independent directors.Independent directorsystem in our country is precisely lack of independence. This paper argues that theloss of the independence of the independent director system in China is rooted in thesystem of appointment and dismissal of independent directors. The appointment anddismissal of independent directors is operated by the Controlling shareholder.This paper focuses on the independence of the system of appointment anddismissal of the independent directors, considering highly concentrated ownershipstructure, corporate governance model under the "dual system" and China’s marketenvironment; Referring more mature system of appointment and dismissal ofindependent directors in other countries; putting forward issue and recommendation.This article is divided into four parts. In the first Part of the introduction, firstly, Iintroduce main content of the system of the appointment and dismissal of independent directors, including the qualifications of independent directors, scale, duration, andnumber of independent directors, system of selection and removal of independentdirectors. I analyze that Problem in the independent director system is lack of uniformlaw. Secondly, I appoint problems in practice. Lastly, I introduce the concernedsituation of independent directors’ appointment and dismissal in overseas.In the second part, I analyze the importance of the system of appointment anddismissal of independent directors to the independence of independent directors andmedium and small shareholders. In the process of independent director appointmentand dismissal, we should ensure the independence of the independent director andattach great importance to the role of small and medium shareholders.In the third part, I mainly discuss the listed company’s internal environment andouter environment. There are independent directors and the board of supervisors inlisted-company. It is very important to coordinate the relationship betweenindependent directors and the board of supervisors. Ownership concentration hasinfluence on the system of the appointment and dismissal of independent directors.Outer environment is as important as internal environment, including marketingenvironment, the independent director resources and other factors.In the fourth chapter, I put forward my own views. My views focus onIndependent director qualification, the proportion and term of independent directors.In independent director nomination procedure, establishing a nominating committee isneed. In terms of election, I propose the introduction of cumulative voting system andVoting rights of the largest shareholder evade system. In the aspect of independentdirectors to recall exercise voting rights apply to special resolution. Establish fairrecall program and reasonable reasons. After that I put forward how to perfect theguarantee mechanism of independent director’s appointment and dismissal system, forexample, making law system of independent directors, establishing the independentdirector association to guarantee independent directors candidate’s competent ability.