Independent Directors And Corporate Value

The original intention of independent directors was to solve the problem of ineffective supervision in the modern company system.Because of the separation of the two powers,the moral hazard of management's deviation from the owner's goal is getting bigger and bigger.Major shareholders may also use their equity advantage to infringe on the minority shareholders.In the operation of listed companies,independent external personnel are required to supervise listed companies.Therefore,the introduction of independent directors is necessary and urgent.The purpose of setting up independent directors in China is to supervise the management of listed companies,guide and supervise the management to make objective and fair decisions,and protect the company's overall interests.In general,listed companies hire external experts as independent directors,most of whom come from well-known scholars,industry authorities,and other people with extensive experience.They not only can provide theoretical advice for the development of listed companies,but also can use practical experience to help listed companies survive the crisis.Some independent directors with extensive social resources can also provide development channels for listed companies.However,in fact,the independent directors did not meet the expectations of investors.Some independent directors did not invest the necessary time and energy in the listed companies.The phenomenon of non-action was more serious.What's more,as the relationship with management is more closely related,it even shields or participates in irregularities.In recent years,independent directors have been sluggish in their performance of duties,and there have been significant departures of independent directors.The majority of investors began to question whether the system's role was fully realized.Therefore,this paper takes the position and characteristics of independent directors as benchmarks,discusses the relationship between independent directors and corporate value,and tests whether it truly plays a role in the development of listed companies.This article starts with the development of independent directors,reviews the role of independent directors,the influence of independent directors on the value of the company,and other relevant literature,and reviews and comments on them.Based on these documents,this paper defines the independent directors and companies The concept of value describes the role of independent directors and the current status of domestic development,the concept of corporate value,and measurement theory.Then it analyzes the relationship between independent directors and corporate value theoretically.Based on these theories,the research hypothesis of this paper is put forward and carried out Empirical test.This paper selects the independent directors of A-share listed companies on the Main Board from 2012 to 2016 to test the influence of the proportion of independent directors,service time,age,and professional variables on the company's value,and select company size,ownership concentration,etc.from the perspective of company characteristics.Factors as the control variables of the study explore the relationship between these factors and the value of the company.The empirical findings of this paper are as follows: First,there is a significant positive correlation between the proportion of independent directors and the value of the company.The greater the proportion of independent directors in the board of directors,the greater the discourse power and independence in the board of directors.The business decisions have been well supervised,which has led to a significant increase in the value of the company;second,the independent director's tenure has not had a significant impact on the value of the company.This may be due to the possibility that the independent directors are in a formal or existential relationship with the management.However,judging from the sign of the coefficient,the independent director's service time and corporate value are positively impacted.The longer the service time,the better the situation of the listed company is.Third,the age of independent directors,accounting professional background,and corporate value are significantly positive.Relevant,older independent directors have more experience in company management and supervision,and independent directors with accounting background can positively influence the development of the company from many aspects.Based on the research conclusions,this paper makes the following recommendations for listed companies:(1)Improve the nomination and election system of independent directors;(2)Improve the accountability mechanism for independent directors;(3)Strengthen the management and training of independent directors;(4)Guarantee Independent directors' right to know and speak.