Research On Independent Director’s Characteristics And Enterprise’s Risk Taking

The independent director system has been placed high expectations since its birth.Listed companies introduce independent directors into their internal corporate governance structure,hoping to form effective checks and balances among board members,improve the scientific nature of board decisions,and thus reduce the risks of business decisions and management of enterprises.At the same time,independent directors are also expected to fulfill their governance functions such as supervision,consultation and decision-making,reduce agents’ opportunistic behaviors and protect the rights and interests of small and medium investors.Therefore,they are widely adopted by modern enterprises.In this study,based on the perspective of independent directors in corporate governance risk preference,we collected the data in 2009-2016 listed companies as samples.Behavioral finance theory,Principal-agent theory and upper Echelons theory are our basic theory.The individual risk preference of independent directors as regulators is described from the personality characteristics such as age,gender,education background and professional experience.In the further analysis we establish a connection between the risk preference of the independent director and the company the level of risk exposures.The main conclusions of this paper are as follows:the more women in the independent director team,the higher the educational level,and the lower the risk-taking level of the enterprise.With the gradual increase of the age of independent directors,the risk-taking level of enterprises will first decrease and then turn to increase.The existence of independent directors with overseas background in the board team will reduce the risk taking of the enterprise.At the same time,this paper studies the difference of the influence relationship between the firms with different concentration of property rights and the firms with different board Sizes.The results show that the correlation is still significant in the sample of firms with smaller board Sizes and more dispersed ownership.This research may enrich the relevant literature of independent directors and enterprise risk-taking level.At the same time,in the business practice,it provides a novel perspective for the enterprise to select independent directors from improving the risk governance level of listed companies.