Relationship Between The Characteristics Of Independent Directors And The Company’s Performance

The independent director system is established by the Western developed countries in order to solve the principal-agent problem generated by the company management and ownership separation, aims to give the independent directors supervisory authority, so as to protect the interests of medium and small shareholders. System of Western developed countries, the board of directors of listed companies is a typical "single system", that is to establish a strict regime of the Board and the independent director system.The system of the board of directors of our country is the so-called "two-tier system", that is to set up a Board of directors and board of supervisors at the same time, the duties of the Board of Supervisors is the special supervision of the Board of Directors and management. We can see that the independent directors of the Board6f Supervisors and the Board of Directors of our country has a similar role, but the different is that most of the members of the Supervisory Board of our company themselves are the company’s staff or retirees, with the company are inextricably linked by them to supervise the effectiveness of the company’s management is doubtful. Also proved that, when the Board of Supervisors in the exercise of its oversight functions often did not achieve the desired results. Due to this defect governance mechanisms exist in China’s listed companies, the China Securities Regulatory Commission issued a "guidance" on the establishment of an independent director system in listed companies in August2001, and this is symbolize of the introduction of the independent director system in official.This article is divided into five chapters, chapter1is "Introduction" focused on the research background, and then pointed out that the research purpose, and thus leads to the significance of this research, the next main content of this paper and the research methods described; chapter2is "The definition of an independent director and the theoretical basis", describes the development of the concept of independent directors and independent directors theory, the solid part of the theoretical basis of the empirical research; Chapter3is "Literature review", of combing the results of the relevant literature before I begin the writing of this article, and at last I summarized the results of previous studies; Chapter4is Empirical research part of the core content. According to research ideas and methods in this chapter, first we proposed the hypothesis, introduced the study sample and data sources, and the indicators selected, then the model empirical examination concluded; Chapter5is "Conclusions and policy recommendations". On the basis of empirical research concluded this chapter analyzes the relationship between the characteristics of independent directors and the company’s performance, and according to the conclusion of the system of independent directors of listed companies in China’s construction and put forward policy recommendations in the appointment of independent directors.On the characteristics of independent directors on corporate performance, we draw the main conclusions are as follows:(1) The relationship between the independent directors gender variables and corporate performance. This shows that there is no difference in men and women of independent directors on the role of corporate performance.(2) From the point of view of the age variable of independent directors, the relationship between the average age of the independent directors and the company’s performance significantly is positive, which shows that the older independent directors can help companies improve their performance through their extensive experience and social experience.(3) The qualifications variable of independent directors on corporate performance has not significantly affected. The higher the level of qualifications of independent directors, and not necessarily interested in corporate performance have a positive impact, which is consistent with many previous studies conclusions.(4) The composite background independent directors are more conducive to the improvement of corporate performance.(5) The proportion of busy independent directors and corporate performance’s correlation is negative.Finally, the innovation lies in;(1) This article changed the previous tend study from the point of view of the "quantity" of independent directors on corporate performance, starting from the point of view of the "quality" of independent directors, selected on behalf of the independent directors of traits related variables, to establish empirical research model analysis of independent directors qualities impact on corporate performance, and provide a reference for later appoint independent directors of listed companies in China to achieve the purpose of perfecting the independent director system.(2) We select more variables representing the characteristics of independent directors, select a variable representing the characteristics of independent directors, including gender, age, education, jobs background and whether part-time, to establish a full independent directors Trait index system, compared to previous research is more comprehensive and more telling.(3) In this paper, the study sample are the utility industry listed companies, the utility industry is China’s "unpopular industry", previous studies mostly concentrated in manufacturing, real estate and other "hot industry ",and research on the utility industry is relatively scarce.