Research On Problems And Countermeasures Existing In The Independent Director System Of China

Along with the rapid development of the capital market and the number of listed companies increasing, medium and small investors are becoming shareholders in the form of buying shares. Because that the majority of listed companies in China were restructured by the state-owned enterprise, there are serious deficiencies in the corporate management structure and the phenomenon of "one share dominance" and "internal control" are serious. The legitimate rights and interests of medium and small investors can not be protected. So in order to solve these series problems, our securities regulatory commission introduced the independent director system officially on August 16, 2001.Independent director system was originated in the United States. China introduced this system is primarily used for the purpose of checks and balances controlling shareholders and protecting the interests of the whole company, especially the legitimate rights and interests of small and medium shareholders. Over the past few years, although the independent director system's implementation played a certain role in governance of listed companies in china, guaranteed the fairness accuracy and reduced the number of mistakes in the company's decision-making, and protected the rights of small and medium shareholders. However, the leading academics of our country are becoming questioning on china's independent director system, because of a series of independent director cases triggered by the financial scandals of listed companies' expositing. Such as the so-called China's first major independent directors "Zheng Bai Wen" incident; Independent directors of "Le Shan Electric Power" were hampered on asking hire an intermediary to carry out investigations; Two independent directors of "Xin Jiang Tun He" resigned after raising objections about company's affiliated transactions; " Erie milk "had been a incident that an independent director was dismissed by the company's administering authority.In this article, I will begin with analyzing the background of the independent director system of china. Combining the status of this system in our country, I will found out the problems existing in our country's independent system from two aspects. One is the system itself inherent design and the other is the operating environment. At the end, I will give out my own countermeasures: re-constructing our country's independent director system. I suggest establishing the Independent Directors Association and constructing the network platform of the pool of independent directors. In addition, the paper also put forward a proposal about perfecting the mechanism of legal protection of our country's independent director system and establishing the system of liability insurance. I hope that this paper can play a certain role for the development of China's independent director system.