The Influence Of Resignation By Independent Directors With Administrative Background On Enterprise Finance

The independent director system is an important means of perfecting the corporate governance defects. However, a lot of independent directors with administrative background are hired by the enterprises due to the influence of various factors in reality. On the 19 th of October in 2013, the Organization Department of the CPC Central Committee issued “Suggestions on Further Standardizing the Problem of Party and Government Leading Cadres’ Concurrent Post in enterprises(Holding a post)”(Hereinafter referred to as Document 18). After the release of Document 18, there was a boom of resignation among independent directors. With the issue of Document 18 as the background and in the perspective of financing, the thesis studied the influence on corporate finance due to the resignation of independent director with administration background and whether they interference the normal allocation of resources in the capital market. Through the above research, the thesis gave an objective evaluation of the influence of independent directors with administrative background on corporate finance, analyzed and verified the validation of Document 18 in promoting the effectiveness of the fair and just competition between the listed companies, thus putting forward reasonable suggestions for improving the system of independent directors of listed companies in China.By the manual collection of the information of the independent directors who resigned after 19 October 2013, and by gathering the quarterly data from 2013 to 2015, through the qualitative and empirical analysis of the influence of independent directors with administrative background on financing, the thesis drew the following conclusions:(1) the resignation of the independent directors with administrative background leading to a significant reduction in corporate finance;(2) the resignation of independent directors with administrative background exerting a greater impact on the bank loans of the non-state-owned enterprises;(3) the resignation of independent directors with administrative background having greater influence on the area of low marketization degree. From these conclusions, it is obvious that in our country political connection has made an impact on corporate finance no matter what the nature of property rights is and either high or low the marketization degree is, which shows that the enterprises in our country have a larger degree of dependence on political connection, the marketization level of our country also needs to be further improved. The existence of independent directors with administrative background can make enterprise bank loans increased, however, this money does not belong to the normal allocation of the capital market. The existence of independent directors with administrative background interferes with the normal configuration of the capital market. Therefore, Document 18 come to standardize the market system, make the industry more fair and just competition, and is conducive to the benign development of the enterprise and to the development of capital market.