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Theory On The Improvement Of Independent Director’s Function Performance In Our Country

Posted on:2015-01-04Degree:MasterType:Thesis
Country:ChinaCandidate:S Q ZhuFull Text:PDF
GTID:2266330428961307Subject:Law
Abstract/Summary:PDF Full Text Request
The independent director system originated from the United States. Although the history of independent director system being introduced to China is not only, the academic and legislation circles have made a large number of studies and regulations on this system. However, in the process of listed corporate governance in our country, the independent director system is still not very effective. With China’s regulatory authorities strengthen the supervision on related party transactions and the investigation of false information disclosure problem, the supervision function of the independent directors seems to become more and more important. Since1996, China has successively issued laws and regulations which made huge improvements on independent director system and delegated special authorization on independent director gradually. However, the design and structure of the system should base on the background and precondition of the system. In China, the relatively special governance structure of listed companies, the insufficiency of the independent directors of staff time and effort and the excessive authorization will lead to imbalance of power and responsibility of the independent director system regulation which will eventually increase the difficulty of independent directors’performance. For a long time, the legislation and the academic circles focus on the supervisory function of independent directors, question their negative role and act, such as "never say ’no’","never quit", therefore entitle the independent director as "vase director","know nothing director". Nevertheless, these functions are not the full role that the independent directors play. The main functions of the independent directors include the supervision and providing suggestions and advice. Thus, a full comprehensive study of the performance of the independent director is particularly important to perfect the system of independent director’s function performance.Apart from preface and conclusion, the paper is composed of three chapters.The first chapter is "The introduction of independent director system and the performance of independent director’s functions", introducing the concept of independent director in policy, rules and regulations in China and abroad, defining and clarifying the connotation and denotation of the independent director, reviewing the development of the independent director system abroad, introducing the relevant laws and regulations of the independent director system in China. Comparing and analyzing theoretical basis of supervision and advice functions of independent director and the content and policy attitude towards these two functions in China and abroad.The second chapter is "The current dilemma of the independent director to perform the functions in China ", expounding the current problems during the process of independent directors to perform the functions in our country. First of all, this section discusses the lack of time and energy for the independent directors to perform the supervision function which caused by excessive part-time jobs, and because of unreasonable salary incentive and issuing mechanism, the enthusiasm of independent directors has been restrained. Secondly, this part put forwards the actual effect in the process of governance of listed companies of the independent director advice function which has been neglected by legislation and academic circles for a long time, and then points out the rationality of independent directors to perform advice function.The third chapter is "Suggestions for the improvement of independent director’s function performance ", proposing that there should be a comprehensive understanding about the independent director’s advice function, reconstructing the accrual allocation mechanism of independent directors, setting up sound independent director liability insurance system, inhibiting excessive part-time independent directors, improving the compensation incentive mechanism and enhancing the professionalism of independent director and diversifying their background.
Keywords/Search Tags:Independent director, Function performance, Supervision function, Advice function
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