The Function Conversion And Governance Effect Of Independent Directors After The Resignation Of Officials

Under the background of the strong government intervention system in our country,enterprises seek political ties in order to survive motivation to obtain political resources and political convenience.Therefore,because of the resources and rent-seeking function of the official's identity,the official's sole director of the listed company has become the "sweet potato"of many listed companies.However,with the publication of "Opinions on Further Standardizing the Part-time Work of Party and Government Leading Cadres in Enterprises" by the Central Committee on October 19,2013,a wave of resignation of the sole director of officials broke out in listed companies.The resignation of the independent directors of officials and the succession of the non-official directors have brought great changes to the political capital,governance effect and business performance of enterprises.This paper takes the companies with the resignation of the independent directors of officials as the research object after the promulgation of Article 18 of the Central Organization Department to study the functional transformation and governance effect of the independent directors after the resignation of the independent directors of officials.In order to achieve the research objectives,this paper summarizes the literature on the functions of the independent director,political connections and the resignation of the independent director.Combining the principal-agent theory and the resource-dependent hypothesis,we select the companies with the resignation of the independent director from October 2013 to December 31,2014 as the experimental group.We use PSM to match the control group,and then use the actual DID.The certification method examines the impact of the resignation of the officials on the following three aspects.Firstly,the paper examines whether the political capital of an enterprise declines after the resignation of an officer's sole director,and explains the change of political capital before and after the resignation of an officer's sole director from the two dimensions of new loans and government subsidies.Secondly,it examines the change of earnings quality after the resignation of the sole director to verify whether the supervision function of the sole director has been realized.Finally,the paper examines the impact of the resignation of the sole director of the official on the performance of the company,so as to verify which kind of loss of political capital and increased supervision has more obvious impact on the performance of the company.At the same time,a robust test was made for the above regression.In the further study,this paper also examines the regulatory effect of ownership nature on political capital and the lagging effect of corporate performance.The conclusions are as follows:Firstly,with the resignation of the sole director of the official,the political capital of the company has indeed declined,which is reflected in the reduction of new growth period loans and government subsidies.Second,the supervision function of independent directors has been brought into full play,showing the improvement of accounting information quality of enterprises.Thirdly,the performance of the company has been improved,which indicates that the loss of political capital caused by the resignation of the sole director and the strengthening of supervision have a positive impact on the performance of the company.In addition,the further study shows the regulatory effect of ownership nature on political capital and the lagging effect of corporate performance.The significance of this study lies in:on the one hand,it broadens the economic consequences of the resignation of officials.On the other hand,through the study of the change of political capital and governance effect of the enterprises after the resignation of the officials,the paper reveals the change of the function transformation and governance effect of the independent directors in China,thus providing evidence support for the establishment of a perfect system of independent directors,which has practical significance.