A Research On The Influence Of Professional Background Of Independent Directors On The Voting Behavior

Under the background of separation of two right, in order to resolve corporate governance issues such as internal control, large shareholders encroachment. In August2001, China Securities Regulatory Commission issued "The guidance of listed Companies about establishment of Independent Director System " and announced the establishment of an independent director system. Because of "Independence", independent directors has been a focus of community. However, through reading and combing of extensive literature on about independent director system, we found that whether domestic or foreign, studies about independent directors mostly focused on the connection between the number or the proportion and company performance, value or other aspects, but the researches about specific operation of independent directors is rare, and the lack of research in this area has become a major constraint to further improve the independent directors system. So this article will seize this research gap, we will do the theoretical analysis and empirical research on voting behavior of independent directors on the board and try to open the "black box" about operation of independent directors.When hiring independent directors, listed companies will inevitably consider independent director’s professional background. Because professional background largely determines a person’s approach, methods, angle and attitude, so this research will base independent director’s different professional backgrounds to study their voting behavior. By reading literature,we found that researches about independent director’s personal characteristics (gender, age, education, professional background, etc.)is very rich, but on the classification of independent director’s professional backgrounds, is the eyes of the beholder, the wise see wisdom, complex diversity. Through repeated reflection and comparison, as well as combined the type of independent director’s professional backgrounds of listed companies, and ultimately we will divide independent director’s professional background into five categories, accounting, law, executive, scholar and governor background.Independent directors are a special and minority groups. The main reason is that they always are elite and academics in their respective industry and has a high reputation and social status, which comes from their achievement through many year’s great effort. The independent directors will better perform their duties to protect their the reputation. So this paper examines the influence of reputation to independent director’s voting behaviors.In this study, we based on the views of independent directors from2005to2013which is disclosed by listed companies from Shanghai and Shenzhen Stock Exchange. In order to examine the impact between different professional backgrounds of independent directors and their voting behavior, we removed the the same vote of independent directors about the same event consensus, leaving only the different opinions about the same event, different votes, we based on this to determine the the samples of independent directors as this study’s data and then collected the relevant information (voting behavior, professional background, social part-time situation, gender, education, etc.) to do further empirical research.Through empirical research, the paper has draw the following conclusions:in the face of management’s proposals, plans, etc., independent directors with accounting background, law background or the executive background will more to vote "non-consent" votes to actively participate in board decisions; independent directors with scholar background tend to vote "yes" votes to passive participation in decision making; independent director’s voting behavior with governor background is not obvious to tend to "agree" or "non-consent." Independent Director with executive or governor backgrounds will be more inclined to vote "non-consent" vote for the maintenance of their own reputation to actively participate in board decisions. Finally, based on the analysis of the conclusions, we put forward relevant proposals about complete the Independent Director System and make a prospect about the follow-up research..