The Independence Of The Independent Director’s Legal Research

In order to protect the interests of the company and the interests of minority shareholders, restricting large shareholders using their dominant positions to do things which is not conducive to the company and shareholders, China took the lead in introducing independent director system in listed companies. Independent directors do not take any other duties in the company, and there are no relationships between independent directors and host companies and major shareholders which might hinder their independent and objective judgment. The main duties of independent directors are to use their independent status, supervise the internal management of the company, and play their due role. The independence of independent directors is a core value of the independent director system. Without the character of independence, independent directors can not fulfill their responsibilities; achieve their institutional values and functions. However, China’s current shareholding structure is irrational; there are many companies with only one big shareholder. Independent directors are nominated by the big shareholder or the management; they are actually employed by big shareholders, so it’s difficult for them to protect their independence of large shareholders and management when exercising powers. It makes the purpose in the design of independent directors system can not be achieved, the independent directors could not play their rightful roles; protecting interests of all shareholders, especially the interests of minority shareholders and the company, and there are a lot of human directors and vase directors. This article study the independence of independent director system from four aspects: overview of independent director, China’s legislation on the independence of independent directors, the theoretical basis of construction of independent director system and the improving of our laws on the independent director system.The paper includes five parts, forward introduce the relevant legislation on the independent director system in China, the motivation and purpose of this writing briefly. The first part discusses the definition of independent director system, the definition and meaning of the independence of independent directors. The second part introduces our legislation on the independence of independent directors. It includes the following aspects:first, China’s current legislation on the independence of independent directors; second, existing problems of our legislation; third, the need for enforcing independence of the independent directors in China.The third part discusses the theoretical basis for construction of independent directors system. It includes the structure of mechanism of appointment and dismissal and organizing system of independent director. The fourth part is about the suggestions on legislative improvement of independent director system in China, including macro legislative proposals and micro legal advice.