Study Of Independent Director Institution Construction Of Listed Company In Shandong Province

The system of independent director originated in the United States. China Securities Regulatory Commission issued the Guidelines of Independent Director System for the Listed Companies in2011. Though this system has been implemented in China for a decade, its effectiveness is questionable. As an developed province in China, listed companies in Shang Dong have unique properties, which is useful to study. Discussing the problem of establishing the system of independent directors of listed companies in Shandong is important to the healthy and smooth development of securities market in our country.Drawing on the basis of research results at home and abroad, we find that the research in our country focus on the supervision of the independent director but regardless of the improvement of the performance of the company through the protection of the small scale firms. This paper compare the operating performance, corporate governance, industry distribution and constitution of executives among of Shangdong, Beijing, Shanghai, Guangdong, Zhejiang and Jiangsu firstly, which is useful to analyze the fact of Shandong province. In the study, we find that the number of the listed company is less than other provinces, the level of securitization is lower, the concentration of the stock rights is higher and the space is large for Shandong to improve. Furthermore, we focus on the state of the independent director in Shandong. In Shandong, the listed companies prefer the independent directors with professional knowledge and the age of them is smaller than other provinces.Secondly, we take the scores of listed company from factor analysis as the dependent variable, take the feature variables of independent director as independent variables and take connected transaction, foreign guaranty and capital rate of big shareholder as intermediary variables. After definition variables we build regression models by different scales to analyze the relationships of the variables.In this paper, we find that there is no relationship between the degree of the independent director and the protection of small shareholders regardless to say improve the effectiveness of the company. Rise the allowance of directors, restrict the number of companies that the independent directors can serve for and hold the scale of local directors are three methods that I proposed in this paper to play the roles of the independent directors. When the number of internal control is not enough, we should focus on the professional knowledge of the independent directors. When the rights concentrate in the internal shareholders, we should focus on the experience of the independent directors. Based on the conclusion analyzed above, we give the suggestions in this paper on how to improve the system of independent director in Shandong province.