Empirical Research On The Effectiveness Of The Independent Directors Of Listed Companies In China

Independent director system is one of the main ways of showing the independence of the board of directors and improving the corporation governance structure.As the practice of corporation governance has been introduced to British and the United States of America, many countries have emulated by starting a 'revolution of independent director system'.In 2001,China securities regulatory commitment issued a document titled;this action assured that independent director system has been established in Chinese listed companies.As a result, the practice of independent director system in Chinese listed companies is becoming one of the central issues within the theory circle.This thesis is researching on the practice of independent director system among listed companies in China, and trying to suggest some policy advices for making improvement of the independent director systemThe thesis employs theoretical analysis and empirical study as research methods.Firstly,the thesis will analyze the meaning of independent director system and its role in corporation governance.Secondly,introduce the origin of independent director system and its development in China.Finally, based on the research done by scholars from home and abroad, choose 757 listed companies from Shanghai A-shares market as samples, take an empirical study on the relationship between independent director system and corporate performance by using multivariate linear regression and factor analysis,and give some policy advices.The creative aspect of this thesis is to bring the doubling situation of the independent director in other companies and the consistency of the working place between the independent directors and the companies as two study factors for the research, at the moment there is no document refers to those two factors in China. According to the study conclusion, independent director system's had a positive effect on corporate performance of Chinese listed companies.However, there are still many requirements missing for the effective application of independent director system in China.The corresponding policy adjustment should coordinate the functional conflicts between the independent director and the board of supervisors,improve the selection, supervisory, and incentive mechanism of independent director, enhance the quality of independent director and the governance environment, and carry the role of independent director system of Chinese listed companies to its best.