Independent Director System In China Run Discussion

Independent Director System is one of the most important parts of corporate governance, which was produced in American in 1970s. The independent director's system can improve the functions and structure of the board of directors, prevent the big shareholder from abusing the shareholding effectively, strengthen the transparency of the board of directors and guarantee the fairness of the board of directors thus get the result of balancing and supervising in power. According to the independent director's system of foreign countries, the implementation and practice of this system are not long. It itself is at a stage of exploring and improving.It is only a recent thing that China introduces the independent director's system. In the first several years when the security market standardized course in our country, the independent director's system of listed company was not listed in the agenda, the policy-making level of listed company has not realized the importance of the independent director. Because it has not formed the macroclimate , the independent director's role in these companies is very limited. With the development of security market, improving corporate governance structure and listed company's quality became more and more cared by regulators , experts, scholars and investors. China issued 《The Guidance About Establishing The Independent Director System In The Public Companies》 in 2001. The guidance requests all the public companies should establish the Independent Director System by June thirty of 2002. This was a great act of the corporate governance in Chinese public companies, and it indicated that Independent Director System had started to be established. October 2005, the revised draft of "Company Law" was approved by the tenth Standing Committee of the National People's Congress. This draft stipulates: The listed company can set up independent director and the concrete way is stipulated by the securities supervision and administration organization of the State Council. This indicates that...