Independent Directors' Influence On Enterprise Innovation

Whether in macroscopic view or microscopic view,innovation is the soul and inexhaustible motive force for development and progress.For a company,innovation is the way to find vitality and is a necessary condition for sustainable development.Innovative decision-making is related to the reduction of company costs,market expansion,and future development.A successful innovation can bring huge benefits to the company,and a failed innovation will waste a lot of resources of the company.Therefore,when companies make innovative decisions,radical managers may over-develop innovative projects in order to obtain excess benefits;conservative managers may carefully develop innovative projects to avoid losses and risks.Independent directors with strong independence have significant effects in reducing agency costs and improving corporate governance.Therefore,this paper speculates that there is a relationship between independent directors and corporate innovation.This paper takes the number of independent directors,the salary of independent directors,the education of independent directors and the overseas background of independent directors as the characteristics of independent directors,measures the innovation level of the company with patent application and approve,and studies the impact of independent directors on company innovation.Because we can't find the patent data of 2017 in CSMAR,and the data before 2009 is seriously lack,so we selects the data of China's listed companies from 2009 to 2016 as a sample,uses STATA for empirical research,descriptive statistics,correlation analysis,regression analysis,and robustness test on independent directors'characteristic data and company patent data.It is concluded that the number of independent directors,salary,and overseas background are positively related to the company's innovation.Then,a case study is carried out to test the above empirical analysis.Considering that the power generation industry is one of the fastest-growing industries in the current era,as the main driving force for China's national economic development,its innovation capability is worthy of attention.Therefore,based on the empirical results,this paper conducts more detailed case studies on the power generation industry,selects representative Huaneng Power International,INC.as the case study object of this paper,and studies its patent status and independent director from 2010 to 2017.The situation is to explore the impact of independent directors on company innovation in the power generation industry.The results of the study show that the number of independent directors and their education have no effect on the company's innovation;while the level of compensation of independent directors is positively related to the company's innovation,the higher the compensation of independent directors,the stronger the company's ability to innovate;When independent directors have an overseas background,their overseas background will have a positive impact on the company's innovation.This is generally consistent with the empirical results.