Research On The Influence Of Independent Director System And Enterprise Risk-taking

The system of independent directors was introduced earlier in foreign countries.The system plays an important role in improving the unfavorable situation that the controlling shareholders of the enterprise control the board of directors,reducing the agency costs caused by the principal-agent relationship,preventing the insiders from controlling and protecting the interests of the stakeholders.In order to improve the corporate governance mechanism in our country,China's CSRC promulgated the Guidance on Establishing an Independent Director System in Listed Companies in 2001.This indicates that the board of directors of listed companies in our country needs to set up an independent director.As an independent third party,it needs to exercise its own supervisory responsibilities to protect the interests of enterprise shareholders and ensure their long-term development.In recent years,although the independent director system has been gradually established in our country,the effectiveness of the independent director system has been controversial.In order to explore the role that independent director system plays in the process of enterprise management in our country,and then put forward suggestions for improving our independent director system and improving corporate governance mechanism,this paper selects the non-financial listed companies that listed in Shanghai and Shenzhen Stock Exchanges from 2005 to 2014 and has issued A shares as the research object,select the proportion of independent directors in the board of directors as an independent variable of the independent directors system,select the volatility of profit(σ(ROA))as an alternative variable of the enterprises' risk-taking,the model was used to analyze the total sample,then by regression analysis of the nature of property rights,the size of the board of directors,shareholding concentration sub-sample,study on the Relationship between Independent Director System and enterprises' risk-taking in Various Aspects,trying to find out the reasons that affect the enterprises' risk-taking,and then make recommendations to improve the system of independent directors,improve the level of enterprises' risk-taking,prompting executives to choose high-risk but NPV positive investment projects.The paper draws the following conclusions through empirical research:(1)The proportion of independent directors is significantly and positively related to the enterprises' risk-taking;(2)In state-owned enterprises,the proportion of independent directors is significantly and positively correlated with enterprises' risk-taking,while the proportion of independent directors in private-owned enterprises is not significant;(3)In the enterprises with the large size of the board of directors,the proportion of independent directors is significantly and positively correlated with enterprises' risk-taking;(4)In the enterprises with low concentration of ownership,the proportion of independent directors is significantly and positively related to the enterprises' risk-taking.The above conclusions show that the independent director system has played a role in our country's enterprises.Due to the poor internal governance of state-owned enterprises,independent directors enter the board of directors as independent third parties,and they do not go through internal control of enterprises to avoid the problems of insider control.Therefore,independent directors can better perform their supervisory duties and supervise the board of directors and executives.In the large-scale board of directors and low concentration of ownership of companies,independent directors can play their role better,these companies have a lower probability of internal control,effectively prevent internal directors of board of directors and executives collude and damaging the interests of other stakeholders,The enterprises' risk-taking will also be improved,and conducive to the long-term development of enterprises.Finally,based on the above research,I put forward my own suggestions on how to improve the proportion of independent directors,improve the internal governance mechanism and improve the system of employing independent directors.This study not only provides micro-level evidence for the effectiveness of the independent director system,but also enriches the research on the independent director system and the enterprise risk commitment.It also provides theoretical guidelines for the improvement of the independent director system in China and has certain theoretical significance.At the macro level,it can guide enterprises to improve their internal governance structure,consciously adjust enterprises' risk-taking level,promote sustainable development of enterprises,and provide economic foundation for the long-term and stable development of the society.