Study Of Legal Issues On Independent Director System In Chinese Listed Companies

Corporate governance is the most important organizational structure among current corporate systems. Mr.James D .Wolfenson,the now president of the World Bank,says " Perfect corporate governance is as important to world economy as healthy state governance to a country."Enterprise financing and attracting international or domestic funds needs good corporate governance. China,now,is in an economic transitional period. The biggest problem with corporate governance within China is the issue "control by internals",without a complete system of applicable governing laws and a strong system to enforce the existing laws,the managerial staff of an enterprise may exercise a strong control over the enterprise making use of the regulatory vacuum after the planned economy disassembles. To some extent,the managerial staff becomes the factual owner of the enterprise,which renders the state ownership a fiction. As is well known,a security market roots itself in and bases its stable development on the quality of listed companies. To perfect the corporate governance is a necessity to the improvement on the quality of listed companies. One key imported system related to corporate governance,the "independent director system" therefore has been introduced to and attracted widespread attention from and heated discussion among economists,managers and lawyers.The thesis will analyze and brief on independent director system from five perspectives. Parts I and II will brief on its originating background,sources,worldwide development,and also on the position and function of an independent director in corporate governance (Focus will be on the analysis and description of a director's legal function and his selection procedure). Part III will analyze roughly the inherent defects in the independent director system brought about by the subjective and objective restrictions on the independence of a director. The main part of the thesis will be Part IV- Independent Director System in China and Part V-Several Thoughts on Improving Independent Director System in China,to which the author has given her priority and preference. In these two parts,general discussions have been made on the emergency and necessity of introducing and establishing the independent director system in China,detailed discussions have been made on how legislation,implementation of laws,and supervision over the company activities can make sure that after its introduction and establishment,the independent director system can play its function and role properly in such a marketeconomy as in our country and finally move forward the perfection of corporate governance of listed companies in our country to adapt our security market more to the opening to the outside world,to meet the challenge of WTO and the needs to enter the international capital market,and to promote the fast and healthy development of our socialism market economy.From other articles on similar topics,this thesis differs in its comparatively thorough analysis and studies on the independent director system combining management theory and company law and in its strategies proposed from comparatively new perspectives on the perfection and development of this system in China.