The Construction Of Law System Of Independent Director's System In The Vision Of Corporate Governance

The role of a rational structure of corporate governance is highly recommended by worldwide scholars and the public, as it can contribute to the furtherance of the share value of a corporate, the competitiveness of the country, and the development of the society. A reasonable system to supervise the governance mode of the Board is a key to the company performance, as the Board plays such an unique role in the management of a corporate. However, we have to say that the Board always fails to play a fair role when it faces all of the corporate shareholders, as the benefit of minority shareholder can be ignored in most cases. This essay is to analyze both the advancement and the limitations of the corporate management by introducing the case of SISHA CO.LTD. The independent director system as a necessary complementary policy is then introduced into the Board of directors system. The writer of this thesis is to evaluate the superiority of the independent director system and then propose several complementary solutions to such system in China.The paper is divided into two parts. The firs part is to make a statement that there are limitations in corporate management system in the country, by analyzing the case of SISHA CO.LTD. In the case analysis, there are mainly five issues:A, the reason of the conflict between the Boards of directors and the supervisors; B, the effect of competing for controlling power; C, rules of standards and behavior for the Boards; D, the approval procedure of the propositions by the Boards; E, the voting power of shareholders'conference to the propositions. The other part is to quote theories to introduce the conceptions of corporate management and the Board of independent directors, and the relationship between them. Thus the importance of the independent directors should be paid attention to. To improve the management of a corporation, this essay introduced the component of the independence director system in which includes the conception, history, characteristic, feature, practice, and the complementary solutions. There are five solutions:A, improvement of legal system; B, Detailed enforcement regulations for the independent directors system; C, make it a rule in the articles of incorporation; D, establishment of operational mechanisms according to the system; E, quality improvement of the Boards'members. The conclusion of the article is that the independent directors system plays the key role in supervising and decision making in the corporate. However, it has to be improved and localized continually to improve not only the handling ability of the corporation, but also the development of the society and the world.