Study On The Independency Of Independent Director

China Securities Regulatory Commission formally issued the Guidelines for the Establishment of Independent Director System by Listed Companies on August 2,2001,which marked the formal implementation of the independent director system in China’s listed companies.Article 122 of the newly revised "Company Law of the People’s Republic of China"("Company Law")on December 28,2013 is the legal basis of China’s independent director system.However,since it’s not a very long time for China to implement the independent director system,there are some important problems emerged in the implementation of the system,such as that the independent directors are not actually independent and the independent directors ’selection mechanism,the independent directors’ rights,obligations and responsibilities are imperfect.If these problems cannot be effectively and completely solved in theory,independent director system is difficult to play its role.The independency of independent director is the core and soul of the independent director system,which is the basic character of independent director and the basis for director to take his position and exercise his power.Independent directors who lose the independence are needless to exist.Since the independent director may not have a substantial interest relationship with the shareholders and the management staff of the company,the independent directoris considered to be objective and impartial in implementation of their duties.Therefore,the introduction of the independent director system has played a positive role in improving the governance structure of listed companies,protecting the interests of the company and the minority shareholders,and restricting the abuse of authority by the major shareholders.This paper concludes the meaning and uniqueness of the independence of independent directors by analyzing the definition of independent directors of foreign countries.Based on this,this paper analyzes the problems and defects of the independent directors and the reason thereof in the actual operation in China.On the basis of the experience of developed countries such as Britain and the United States and in combination with the concrete practice of independent director system in China,this paper puts forward specific suggestions and opinions on the independency of independent director.The main content of this article:The first chapter is mainly about the practice of the independent director system in foreign countries.The first part lists the different rules of the independent director system in the United States,Britain and Japan at different times.Although the United States is the birthplace of the independent director system,since each state of the United States have its own legislative power,there is no uniform stipulations in nationwide scope.In common law,Britain is one of the countries which established the independent director system just later than United States.In fact,there are no appellation of independent directors in Britain,only has non-executive directors;and there are no legislative stipulations of then on-executive director system in Britain,but a series of reports to establish independent director systemas a whole.In Japan,the introduction of the independent director system is relatively late,and the application is not extensive.Its provisions on the independent director system is mainly concentrated in the "Japanese corporate governance principles".In China,provisions on the independent director system mostly scattered in all kinds of regulatory documents.In summary,by analyzing the different rules of the independent director system in different countries,this paper sums up the generality of the independent directors system.And on the basis of the generality,this paper analyzes the characteristics of the independency of independent directors.The second chapter is mainly about the independency of independent directors in China.Combining with the current legislative form and legislative content,we can see that the legislation of the independent director system is unsatisfactory,the legislation level is low and the content is scattered and not logical.Through the data analysis of the performance of independent directors,China’s introduction of the independent director system actually did not achieve the expected results.Independent director is not independent in the actual operation,which also to some extent contrary to the original intention of the introduction of the system.In view of the problems existing in the independent directors,the paper analyzes the reasons why the independent directors are not independent in China,mainly from the factors of the system itself,the external environmental factors and the individual qualities of the independent directors.The third chapter mainly deals with the improvement measures of the independency of independent director in China.As one of the most important systems in the corporate governance structure,independent director should be stipulated in the scope of law and the internal director’ incumbency in terms of qualifications,service conditions and service procedures should be further enriched;the rights,obligations and responsibilities of independent director should be clarified in order to further improve the legislation of China’s independent director system.With the premise of legal regulation,supplemented by the necessary supporting measures,the talent market for independent director can be established and improved and the regulatory mechanism can be constantly improved.