An Empirical Study On Resignation Of Independent Directors Of China’s Listed Companies

This paper does research on the efficiency of independent directorsystem in China， from the view of resignation of independent directors.The research includes two parts： impact of resignation of independentdirectors on the market， as well as the factors that affect the resignationof independent directors.Our event study examines the information content of independentdirector’s resignation announcement and found that after resignationannouncement abnormal returns and cumulative abnormal returns weresignificantly negative. Conclusion is that our system of independentdirectors of listed companies is effective to a certain extent. Independentdirectors’ resignation sends a negative message to the market.Through binary logistic regression， we conduct a study of factorsaffecting the resignation of independent directors and found that theROE， earnings management， audit opinion， significant litigation，largest shareholder changes，as well as the number of board meetings are major factors in the resignation of behavior choices， while the quickratio， asset-liability ratio， ST， significant violation， concentrationlevel of equity and the remuneration of independent directors have nosignificant effect. Conclusion is that the resignation of independentdirectors is affected significantly by the company’s profitability， thetransparency of accounting information， audit opinions and majorlitigation. In addition， the change of major shareholders and the numberof board meetings also have a significant effect， while the remunerationof independent directors has no significant impact.