Operating Mechanism Study Of Independent Director System Based On Principle-Agent Theory

Since independent director system is applied to listed corporates' governance inChina, independent directors have played definite role. For a variety of reasons,however, especially because specific operating mechanisms of Chinese independentdirector system isn't perfect, independent directors don't give full play to functions ofsupervising managers and perfecting corporate governance. So it's urgent to researchon operating mechanisms of Chinese independent director system. Whereas, now theresearch on that lays particular emphasis on qualitative analysis and demonstrationanalysis, the research based on quantitative analysis is lack. This dissertation focuseson the quantitative research about incentive mechanism, collusion-proof mechanism,assessment mechanism, market admittance and exit mechanism, adopting gametheory and principle-agent theory. The main contents and result are as follows.(1) A model about decision of optimal supervision level of independent directorsis made and effect factors of optimal supervision level are discussed.(2) In view of the situation of China that market economy system, especially itsenterpriser selection mechanism and social credit valuation mechanism, isn'tamplified, a model of dynamic optimal contract about combining reputation incentivemechanism and explicit incentive one is designed. Some proposals about how to bringthe incentive of reputation mechanism into full play are tabled.(3) The possibility and reasons for that there is collusion behavior betweenindependent directors and managers are analyzed. Three models of optimalcollusion-proof contract are designed, respectively under the case of endogenousreward, one of exogenous reward and re-supervision mechanism and one of ex-antecollusion-proof and ex-post collusion-proof simultaneously, their optimal conditionsare found and some measures of collusion-proof are put forward.(4) Considering characteristics of independent director system of China, anassessment index system of independent directors is made and a model of fuzzyintegration measurement of independent directors based on Analytic Network Processis established.(5) Suggestions to designing and perfecting independent directors marketadmittance and exit mechanism on aspects of law, organization, institution andnomination system are made. Utilizing game theory and method, dynamic gamemodels of imperfect information with and without market exit mechanism are set up,conclusions such that market exit mechanism and market credit system havesubstitution relationship are provided.(6) Risks that independent directors are confronted with are summarized. Thenadvices about how to set up and consummate independent director duty affixationsystem and benefit protection mechanism are offered.(7) In this dissertation, simulation analysis about the model of dynamic optimalcontract about combining reputation incentive mechanism and explicit incentive oneis engaged. Moreover, an experimental study on a model of fuzzy integrationmeasurement of independent directors based on Analytic Network Process isconducted.