Study On Chinese Independent Director System Reform By Grey Relational Analysis

Independent director system was introduced to China in August of 2001, with a purpose of dealing with problems of internal exchange,false statement and manipulation and disobey of rales, which were caused by the fast development of China stock market so as to protect the interest of small-middle sized shareholders. And the mark was "on the Directed Suggestion on Establishing the Independent Director System of Listed Companies" issued by China Securities Regulatory Commission. However, during the past 6 years, this system developed not absolutely in the expected direction and it had the phenomena of being unsuitable to Chinese environment. The main reasons lay in that the independent director system in accordance with Chinese national situation was not built. Owing to that the supervision department lacked relevant theoretical guidance; the reform effect was not significant. Presently, scholars just put forward the suggestion of independent director system reform, but not pointed out the systematic procedures of reform implementation.Combining the characteristics of listed companies' governance model, under Chinese social and economy environment, this paper starts from the perspective of double reforms in mechanism and institution, and makes creative research on this system by combining the quantitative method with the quantitative method.Firstly, this paper concludes and analyses the development of independent director system in China, and puts forward the concept of "Gresham's Law". And then, it represents the reform thinking of three aspects—compensation,proportion and performance evaluation, of all, it constructs the independent director evaluation index system by AHP; Recombining the governance achievement indexes of listed companies and using Grey Relational Analysis model, this paper calculates the related degree that can affect the achievement between the three factors of independent director and achievement indexes, and makes an order of them. It will have a guidance meaning to implement the reform plan on the base of theory reform mentioned in the previous paper, and it will in certain degree be helpful for supervision department to understand the independent director system and to implement reform plan.The innovation points of this paper lie in: to put forward suggestion on the running mechanism and institution reform from the new perspective of independent director market; to propose the new conception-- "Gresham's Law" of independent director; to design the performance evaluation index system of independent director by AHP under the situation of that the performance evaluation mechanism of independent director is not still created; to analyze it practically by Grey Relational Analysis model. What's more, it is uncommon in academic articles to put forward the reform measures and simultaneously to explain the concrete implementation method.