The Independent Directors Of The Listed Company Financial Background And Listed Companies Performance Correlation Studies

The Securities Regulatory Commission issued “Guidance on the establishment of an independent director system in listed companies " in August 2001, and officially introduced independent director system. In addition, the guidance clearly states that at least one independent director from the independent directors of listed companies shall be an accounting professional, which highlights the importance of independent director’s financial background. In recent years, more and more scholars began to study characteristics of independent directors.This paper treats the independent directors who has financial background as the research object. Firstly, paper sorts out the associated documents from previous researchers. According to career background, financial independent directors are divided into 3 types: accounting property of independent directors, financial property of independent directors and department of independent directors. Then it defines the financial independent directors, and systematically expounds the basic theory, which makes a theoretical basis for the study. The empirical results show that accounting class of financial independent directors and company performances have significantly positive correlation. It will benefit to inspect and make strategic decisions if financial accounting independent directors have the title of senior accounting or accounting qualifications of CPA. The Economic class of Financially Independent Directors had no significant impact on company performance indicating that China’s financial industry continues to improve and it gives less chance to artificially manipulate.Government class of financial independent directors and corporate financial performance was significantly negatively correlated with. During the time of economies in transition, the country strengthens the management of the national government officials as an independent director. The financial independent director’s experience of working in the government cannot promote enterprise performance. Excessive government resources, however, do harm to long-term development of enterprises. Finally, according to the conclusion of this paper it gives some suggestions about how to improve the system of independent directors of listed companies from three aspects: optimizing hiring mechanism of independent directors, clearing the rights of the independent directors and promoting the professionalization of the independent directs.The contribution of this paper is to enrich the corporate governance literature from a new perspective and to expand and deepen the study of the impact of the characteristics of the independent directors on carrying out the independent director system. It provides a reference proposal to hire independent directors more pertinently. Also it plays a guiding role on improving the independent directors’ own quality so that they can make full use of their merits.