Research On Some Legal Issues Of The Institution Of Independent Directors Of China

The institution of independent directors was first produced in the United States. When the phenomenon of’strong managers, weak owners’appeared because of dispersed equity structure, the owners suggested to produce the institution of independent directors to protect their personal interest. It has been proved that the independent directors in the United States had taken an active role in protect the owner’s interest through monitoring managers. With the development of China’s economy, some of the problems in the companies of the United States have also happened in Chinese companies.So Chinese Government try to solve these problems by transplanting the institution of independent director of the United States since the1990s.The effect of the institution of independent directors in china depends on the independence and activity of the independents, which have strong connection with the appointing system, the salary system and the liability system of the independent directors. At the present, Chinese independent directors haven’t played a proper role in protect small shareholders according to the current corporate management practice in China. So it is necessary to prefect the institution of independent directors in China by reviewing this institution carefully right now.This article has reviewed Chinese institution of independent directors through comparing and analyzing the differences about appointing system, salary system and liability system between China and other western countries, and then found out the defects in these systems. At last, this article reaches a conclusion that the Chinese institution of independent directors can be more perfect by changing the quality of independent directors and voting processing, making the salary system more multivariate and the liability system more detailed,This article is divided into three parts beside abstract and epilogue. In the first part, the author analyses and makes suggestions to the appointing system. In the second part, the author analyses and makes suggestions to the salary system. In the last part, the author analyses and makes suggestions to the liability systems. These three parts all take a same method to analyze, which is fist introducing the systems in China and western countries, and then comparing differences of systems between China and western countries, and at last get into the final conclusion.