Compare The Effectiveness Of Chinese State-owned And Independent Director System Private Listed Companies

In August2001,“the Guiding Opinions on Establishing Independent DirectorSystem of Listed Companies " was promulgated by the China Securities RegulatoryCommission, which marked the independent director system in listed companies inChina has begun full implementation. The establishment of the independent directorsystem in China is a compulsoryprocess, in which it was leaded by the Governmentand obeyed by listed companies. In the situation, the unique characteristics of theindependent directors of listed companies in China were formed and influenced toplay the role of independent directors. Whether does independent director system inChina to play its due role or not? What are the characteristics of independent directors?Which features does affect corporate performance? How do they affect the corporateperformance?In the past, many scholars studied the relations between the independentdirectors and corporate performance of the companies listed on the Shanghai andShenzhen without considering the structure of property rights that may produce thedifference of results. Due to different property rights of enterprises, the corporategovernance structure and independent director system are different. Whether theindependent directors of the state-owned and private listed companies because ofdifferent property rights does have some different effects is worthy of our furtheranalysis.Therefore, it is meaning to analyze the relationship between the corporateperformance and the independent directors of property rights of state-owned andprivate listed companies respectively in the structure of property rights’ view, whichprovides guidance for these two types of dominant listed companies and provides atheoretical reference for the development of China’s independent director system. So,it has important practical significance in our country.The effect of independent director features on corporate performance and thedifference between the state-owned and private listed companies are analyzed from theory in the thesis. On this basis, Shanghai and Shenzhen A-share listed state-ownedcompanies and private companies in2011as samples, of which ROE indicators areselected as corporate performance measure, the features of the independent directorsand corporate performance regression analysis are given. The empirical results showthat the effect of independent director in private listed companies on corporateperformance is higher than that of the state-owned listed companies. The firmperformances in private listed company show significantly positively correlated withIndependent directors’ age and the correlation is diminishing. However, corporateperformance and independent Director Age of the state-owned listed companies is notrelevant.The corporate performance in the state-owned listed companies showpositively correlated with times of independent directors attending the conferences,but that is not relevant in private listed company.Independent directors’ remunerationin the state-owned listed companies is positively correlated with corporateperformance and the effect is decreasing, and that of private companies is just theopposite.The proportion of independent directors and place of work consistency intwo types of enterprises is not relevant with corporate performance. Finally, that therelation between the supervisory committee and the independent directors should beclear and coherent is suggested and that independent director system can be improvedfrom the perspective of the market of independent directors, system requirements,remuneration incentives, exercise institutions and external environmental isrecommended in thesis.