Influence Factors Of Independent Director's Dissent And Stock Market's Response To Dissent

In the literature on the Independent Director System,because the board of directors is usually "closed for deliberation",the independent director's performance behavior is difficult to be observed by the outside world.Therefore,when Western scholars study the independent director's supervisory function,mostly around the identity of directors,the structure of the Board of directors,independent director characteristics,background,employment and so on.But this kind of research method easy to cause the endogenesis problem and causes the conclusion to have the limitation.In 2004,the Shanghai Stock Exchange and Shenzhen Stock Exchange required listed companies to publicly disclose the voting and opinions of independent directors at company meetings.This regulation has undoubtedly unveiled the "mysterious veil" of independent directors working in the company.The details of the independent director's duties can be observed.Based on this special information,this paper collects the data of a-share listed companies from 2004 to 2017 on the basis of reading and combing the relevant research literature,starting from the factors of company level and individual level,this paper studies the factors that lead to independent directors' dissent,and adopts the event study method to examine the stock market's reaction to the signal of independent directors' public dissent.The results show that the low ROA of the company will cause the objection of the independent director,it is found that the growth rate of debt financing,the growth rate of stock financing and the decline of retained earnings will lead independent directors to demur.This shows that independent directors are not only concerned about performance,but also look into the factors that may reflect the agency problem.The degree of ownership concentration has a negative effect on the independent directors' dissent,which shows that the major shareholders will still exert influence on the independent directors and exclude the supervision.The more the number of independent directors in the board of directors,the more the possibility of the independent directors' demurrer,which proves the independent directors' characteristic of "more people and more power" in the supervision.The paper also finds that independent directors with high incomes are less willing to voice their objections,and male independent directors voice their objections more frequently than female independent directors.The result of event studymethod shows that the stock price jumps down significantly after the public demurrer of the independent directors,which indicates that the stock market interprets the demurrer of the independent directors as the internal problems of the company.After synthesizing the empirical research of this paper,we found that the independent directors not only have done a serious job in the company,but also found that there are potential problems in the company,and the public dissent will cause the negative reaction of the stock market,it shows that the objection of the Independent Director has information effect.According to the conclusion of the empirical research,the author puts forward the following suggestions: appropriately increasing the number of independent directors in the company,making the company accept more investors' supervision;Driving independent directors to work harder;bring in outside investors,and reduce control of the company by large shareholders.