The Research Of Independent Director System In The State-owned Holding Company Based On The Financial Supervision

Independent director system is an institutional arrangement under the singularity governance mode system of corporations and highly fragmented ownership structure in the countries of Anglo-American law system. The implementation of the system plays important roles on balancing the control of the internals, strengthening financial supervision, and protecting the interests of shareholders. However, the introduction of independent director system to China has its unique background and significance. At present, China's listed companies are still based on an absolute majority of state-owned holding company, their controlling shareholders are the state-owned investors, and executing layers are the accredited representative of the state-owned institutions. The state as the owner is difficult to supervise effectively to their selecting managers under the premise of the imperfect corporate governance structure, thus forming an act in"one share overwhelming big"against the interests of small shareholders, as well as falsification of financial statements, provision of false financial information under"internal control", etc. Distempered financial supervision system is clearly not conducive to protection of the state-owned capital and the broad medium and small investors, thus resulting in serious consequences that many state-owned holding listed companies suffer significant financial losses or even bankruptcy reorganization. So forming an effective system of financial supervision is necessary in the state-owned holding companies. The board of supervisors takes two to tango forced the introduction of independent director system in China.In practice, though the independent director system has some effectiveness in the state-owned holding company, but it do not realize its initially expected, especially from the financial supervision of view, the questions of its existence are still to be resolved, mainly for the"independence"lack of institutional arrangements leading to the inherent defects; functional orientation of the unreasonable and lead to role conflict with the Board of Supervisors; incentive system is not perfect, risk-benefit is asymmetric; responsibility system is not clear, protective measures need to be improved; financial experience is ignored, the issue competence; information channel is unblocked, the financial supervision of performance of their duties are difficult and so on. In view of this, this paper proposes the improving countermeasures of independent directors system in the state-owned holding company based on the perspective of financial supervision: suggested in the operational system that reforming the selection system, improving the incentive system, strengthening accountability system to effectively protecting the independence of independent directors; in the operating environment, creating barrier-free communication channels of financial information, rationalizing the financial supervision relationships with the board of supervisors; in supporting measures, speeding up the legislative system process of independent directors, establishing an independent Institute of Directors and other social groups, and exploring independent director liability insurance system to provide supporting facilities for the independent director system.The innovations of this paper are abandoning the consistent thoughts of research on independent director system, locating the research perspective on the financial supervision factions of independent director, and clearly emphasizing unique role of independent director in financial supervision in the company. Meanwhile, this paper proposes recommendations in operating system, operating environment and supporting measures, based on state-owned holding company for the current problems. The proposals aim to purposefully and practically, enhance the financial supervision performance of independent directors of state-owned holding company, and prompt the system gradually perfected and improved.