The Value Of The Independent Director

The experience of European and North American countries indicates that the independent director system in corporate governance plays an important role,but the practice found that the independent director is "vase" who receive high compensation in the listed company,and they are not well fulfill their duty,On October 19,2013,the organizing department of the Central Committee of the Communist Party of China(CCCPC)issued “The opinions about further standardize the cadres of the party and the government of the issue of part-time work in a firm”(No.18 document),required current or to have not been the departure formalities the cadres of the party and the government can't part-time work in a firm.“No.18 document” led to the independent director of the listed company “resignation tide”,and further exposed the listed company of our country universal existence "official independent director".“No.18 document” issued,for to study the effect of independent directors on the value of the company provided the good condition of the empirical data,greatly reduce the interference of independent director's "endogenous problem".Based on this,this paper collected by hand with 2013-2014 listed companies all independent director's personal information,to determine the political connection and the political connection ratio of the listed company.This paper first examines the investor's market reaction when the “No.18document” issued,and found investors for listed companies with political connections have A significant market reaction after “No.18 document” issued,for specific performance,state-owned listed companies had hired in political links of the value of the company fell more obvious.Followed by October 19,2013-December 31,2014,the independent directors of the listed company resignation as sample,analyzes the reasons of independent directors to resign,to explore the value of the company of the independent directors to resign,and the independent director's personal characteristics influence on the value of the company.This paper found that:(1)has a central political connection of the independent director has played a significant role in state-owned listed companies,and has the independent directors of local politics and no obvious play the role of is good for the company;(2)the independent directors as a compensation committee or have rich work experience is better perform their functions,and as a compensation committee or have rich work experience of the independent directors to resign the value of the company fell more significantly.This paper studies show that independent directors who employment political connection of the independent director isthe listed companies to seek resources support,influence the value of the company's important way;served in the special committee and have rich work experience can be better to performance supervision and advisory functions.Research conclusion of this paper is the hiring of the independent directors of listed companies,improve corporate internal governance provides the beneficial reference.