| Although the transition of China’s economic system and the restructuring of state-owned enterprises brought the binary corporate governance model characterized by "three boards and four powers" which consists of the shareholders meeting, board of directors, board of supervisors and senior managerial personnel into being,"The Single-Large Shareholder" problem generated during the restructuring of state-owned enterprises brought about a series of problems in China’s corporate governance, which hinders the reformation of China’s corporate governance. Under China’s Ownership Structure with state-owned shares being the largest one, the owner of state-owned shares is missing, and the intendant of the state-owned shares in listed company becomes the controlling shareholders of the company. Not only do the controlling shareholders control the shareholders meeting, but they take charge of the board of directors generated by the shareholders meeting as well as the senior managerial personnel elected by the board of directors, which results in the problem of "Insider Control". The controlling shareholders used to encroaching company’s assets with the power they have by such means like Related Party Transactions and so on, which violates the minority shareholders’interest and thus blocking the process of completing China’s corporate governance as well as the capital market’s healthy development. As distinguished from the problem of "Insider Control" caused by over-dispersion of ownership in England and America, China’s problem of "Insider Control" should attribute to the over-concentration of ownership. In order to solve this problem, CSRC brought independent director system in China’s listed companies in Aug.,2001in the hope of relieving the problem of "Insider Control" and protecting the minority shareholders’rights and interest as well as improve the effectiveness of the corporate governance in listed companies. However, under the governing circumstance with "Insider Control" of China’s listed companies, there is no uniform opinion on whether the independent director system can realize the original intention of solving the principal-agent problem and protecting the minority shareholders’interest, in spite of which, with the discussion on improving the independent director system among the scholars and businessmen being increasingly intense, more and more independent directors resign from the listed companies with a large amount of them showing the tendency of resigning for "personal reasons" or "healthy reasons" or "work reasons". According to the resignation announcements of the independent directors and the annual reports of the listed companies, there are40companies in which the event of independent directors’irregular resignation happened in2008, and the number increased to84in2010, and by2011, the number further increased to167. The resignation of the independent directors presents a fast increasing trend.The paper made an empirical study with the listed companies in which independent directors’irregular resignation happens from2009to2011being the samples. Before the empirical research, the paper unscrambled the theoretical basis of the independent director system’s establishment and development course of the independent director system as well as relevant studies on independent directors at home and abroad. Then, the paper systematically described and inductively concluded influencing factors of the independent directors’irregular resignations. Also, the paper put forward study hypothesizes, setting of the variables and selection method of the samples and data.In the part of empirical research, the paper conducted a simple statistic of the characteristics of the resigned independent directors first and briefly analyzed the gender, age, educational background and occupational background of the resigned independent directors. Then, it compared the resignation samples with the contrast samples through T-test and Pearson correlation analysis of the independent variables. According to the results of T-test, in relation to companies’financial risks, the independent directors are more sensitive to event risks and governance risks. To further study the factors that influence independent directors’resignation most notably in the case of multiple risks coexists, the paper established a binary logistic regression so as to verify the influence degree of companies’risks and independent directors’ earnings and cost have on independent directors’resignation. The results imply that:(1) the independent directors are not sensitive to salary they receive from the companies they worked for, but they are highly sensitive to the cost they have to pay for holding the position, that is to say, the more frequent the board of directors hold meetings, the higher the probability of independent directors’resignations is;(2) the four static indicators representing listed companies’financial risks all fail the significance test, and only the ST indicators representing companies overall risk pass the significance test with significant degree being1%, which indicates that independent directors are insensitive to static indicators which stands for the listed companies’financial risks and companies overall risk is the most important factor that influence independent directors’resignation;(3) the independence degree of the board of directors has no influence on independent directors’ resignation. Ownership concentration influences independent directors’resignation to a small extent, while the change of controlling shareholders significantly influence independent directors resignation, which, to some extent, implies that China’s independent directors have weak independence;(4) The fact that listed companies experience material litigations and assurances is positively relative to probability of independent directors’resignation, while indicators representing related party transactions have no relevant relationship with probability of independent directors’resignation. These results state that in case of companies various risks coexist, only the ST indicator which can reflect companies overall risks and emergency indicators like change of controlling shareholders for governance risk and material litigations and assurances for event risk have significance influence on independent directors’resignation, which implies that although companies’risks would influence independent directors’resignation to some extent, the independent has high toleration to some risks.In the end, the paper proposed some suggestions on improving China’s independent director system, such as norming the disclosure of independent directors’resignation announcement, setting up society of independent directors and establishing a talent pool of independent directors, imparting necessary power to the minority shareholders to nominate independent directors, and implementing network voting and so on.Compared with existing studies, this paper has the following innovations. Firstly, although the phenomenon of independent directors’resignation is more and more general in China’s listed companies, there are seldom studies discussing effectiveness of the independent director system from the perspective of independent directors’behavior of resignation. The paper divides the resigned independent directors into two groups according to the resign reasons stated in resignation announcements, with one being regular resignation, and the other being irregular resignation. The paper tries to find out and analyze the real reasons that independent directors resign by studying the personal characteristics of independent directors who resigned irregularly and relationships between corporate risks of listed companies where independent directors resigned irregularly and resigned independent directors’cost and earnings and independent directors’irregular resignation, which would enable us to further understand the problems existing in China’s listed companies, and which is also helpful to regulatory authorities, listed companies, investors and independent directors themselves. Secondly, to see from the research perspective, existing studies on reasons and influencing factors of independent directors’resignation are mostly normatively elaborations and summaries from the angle of companies and system, which is relatively macroscopic. While this paper makes an empirical study on influencing factors of independent directors irregular resignations from perspectives of both company side and independent directors side, which provides a new study perspective for study of independent directors and independent director system. Thirdly, as for selection of the variables, unlike the existing literatures which usually select the largest shareholding ratio to measure ownership concentration, this paper chooses the ratio of the shareholding proportion of the largest shareholder and sum of that of the other nine shareholders ranking top ten in shareholding ratio. This is mainly because that although the shareholding ratio of the largest shareholder of some companies is about10%, with some being even less than10%, the sum of shareholding ratio of the other nine shareholders is less than1%, in which case, the largest shareholder can also be the controlling shareholder of the company. Therefore, to select this variable may have the samples more complete and reduce difference of the study.In addition, the paper is insufficient from the following points:(1) as the disclosure of independent directors’resignation is still not standard, there might be situations that independent directors’resignations are not announced or that the listed companies take advantage of change of board of directors to cover up independent directors’resignation, which would result in the deviation of samples thus leading to certain difference in statistic results;(2) as it’s hard to measure independent directors’fame which might influence independent directors’ resignation, the paper didn’t put it in the model, which might lead to the incompleteness of the model. |
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