Research On The Relativity Between The Responsibilities Of Independent Directors And Illegal Action Of Companies

After the 1990 s,the solution to the agency problem between shareholders and management was expected to introduce independent directors.The independent director system has become one of the important mechanisms for the companies to improve the governance structure.In terms of China's listed companies,irregularities often occur,such as the management of abuse of power,large shareholders using illegal means to encroach on the assets of listed companies.Due to the shortcomings of the governance mechanism and the existence of insider control problems,the interests of external and other stakeholders in corporate governance activities have been violated.Whether the independent directors can exert their expected supervision effect in the listed companies of our country? Whether it can inhibit the occurrence of irregularities in listed companies?The standards of independent directors' performance depend on whether they can inhibit the occurrence of corporate irregularities.The paper puts forward the research hypothesis,builds research models and uses logistic and other regression analysis,based on A-share listed companies' data in Shenzhen and Shanghai Stock Exchange from 2008 to 2015.The results show that:(1)The remuneration and reputation mechanism of independent directors can effectively restrain the illegal behavior of listed companies;(2)The time and effort of the independent directors is positively related to the company's irregularities,which may convey the company's irregularities;(3)The scale and professional ability of the independent directors do not pass the significant test,which shows that the two factors can't restrain the illegal behavior of the listed companies.Therefore,the suggestions in this paper are as follows: First,improve the independence of independent directors;Second,standardize the management of independent directors;Third,improve the incentive mechanism of independent directors;Finally,protect the interests of small and medium shareholders with the combination of overall supervision and key supervision.