Study On Integrating Function Of Independent Director

This paper gives the new framework on independent director function by the synthesis of agency and resource dependence theory, response to its inconsistent with the existing research. We hold that independent director function includes not only supervising, but also providing resource. Based on this, we set the hypothesis and establish the impact model of the independent director function to do empirical test.Empirical study found that the current domestic independent directors do play a certain role, but the whole system of independent directors have remained at the initial stage, only studying on the number of independent directors will not fully comprehend functions of independent directors. In addition, functions of independent directors aren't defined clearly enough, and the role of it is still relatively indistinct. Lacking of a full understanding of the construction of the independent director system is the main reason for the imperfect system.Large differences exist in the previous work, as to the relationship between Independent directors and Company performance. We found that no significant relationship between the proportion of the independent directors and the performance, whereas providing resource of independent directors is significant driver of performance. The previous findings is controversial, given that their analysis mixes them together , or ignore the capital of independent directors, only focus on the proportion of independent directors. That's probably one of the reasons for lacking consensus of the empirical Study between independent directors and performance for the existing literature.At present, the understanding of the functions of independent directors, just stay in the stage of function monitor, and hold independent directors focused on monitoring the management behavior. But according to study, this is only one of the functions of independent directors. The ultimate aim of establishing an independent director is to protect the interests of shareholders, increase long-term profit. This requires independent directors finish not only the monitoring function, but also preventing the emergence of large shareholders or management from damaging the interests of shareholders .Meanwhile, independent directors help enterprises improve their performance with providing resources in accordance with their respective capital. Only when the two facets are combined together will we fully understand the functions of independent directors.We should pay attention to the important role through the fully understanding of Functions of independent directors. When the monitors draft related mechanisms, , they will not only require the number of independent directors on the mends, but pay more attention to the qualitative standards. In listed companies, the management does not attach importance to the independent directors; even exclude independent directors, mainly based on the monitoring functions of independent directors. The fully understanding of the independent directors functions contributes to cooperation, as they both share one common goal, that is making efforts for the company according to their respectively resources, which will ease their intensive relationship and improve the performance. When Shareholders choose independent directors, they will emphasize not only its independence as well as the capital of independent directors. Meanwhile, shareholders especially the Board will create a good condition for independent directors. For the majority of investors, independent directors will help them make better investment decisions with further understanding. the role of independent directors is neglected previously, the company's resources is not conducive to the overall assessment and on the performance of the company's forecast, which would be adverse to invest.Overall, further clearing the independent director functions is the ideological foundation for independent directors of listed companies to play the role. Only when clearing the functions of independent directors can we attach importance to the role of it and create the suitable environment for it. According to the results of empirical testing, the study puts forward proposals on the domestic development of the independent director system at last.