Research On The Fault-tolerant Mechanism Of Independent Directors Of Listed Companies

In a general way,a country’s competitiveness depends on its economy,and its economic competitiveness depends on its enterprises whose competitiveness is counted on the product market and the capital market.In this situation,the competitiveness of the capital market is highly related to the quality and level of corporate governance.Therefore,corporate governance has an essentially important impact not only on enterprises but also on social development.Independent directors,as a significant part in corporate governance,play an irreplaceable role in supervising,managing and making decisions in company’s operation.In recent years,the new Securities Law has been introduced in legislation to increase liability for violations of independent directors.In the administration of justice,cases like “Kang Mei case” show that independent directors are ordered to bear huge joint and several liability.Meanwhile,the above two situations and the unclear inherent functions and obligations of independent directors together arose heated discussion in society.A large number of independent directors are forced to “vote with their feet” and choose to leave.The wave of independent directors’ departures warn us that the mismatch between rights,responsibilities and interests in the performance of their duties has become a prominent problem in the current independent director system.Therefore,it is urgent to establish the fault-tolerant mechanism for independent directors,optimize the identification and judgment criteria of independent directors’ duty of diligence,improve the restriction and exemption system of independent directors’ liability,and implement the liability compensation mechanism of independent directors,so as to reduce the burden of independent directors and make independent directors play their due role in corporate governance.The full text is divided into five parts.Except the introduction,the dissertation is written in the logic of expounding theories,analyzing problems and solving problems.And the author uses the case study method,comparative study method and the benefits measurement method to make a preliminary exploration about the construction of the faulttolerant mechanism of independent directors in China.The first part is an introduction,which introduces the background,the research purpose and the significance of this dissertation,and sorts out the current situation of the research at home and abroad from three aspects: the liability of independent directors,the limitation of the liability of independent directors and the related supporting measures of the fault-tolerant mechanism of independent directors.The second part introduces the relevant theories of the fault-tolerant mechanism of independent directors,which are explained from three aspects: the theoretical basis,the legal basis and the legal connotation of the fault-tolerant mechanism of independent directors.Among them,the theoretical basis of the fault-tolerant mechanism of independent directors mainly includes the theory of business risk,the theory of unification of authority and liability and the theory of optimal attribution of infringement.The legal basis of the fault-tolerant mechanism of independent directors emphasizes that the establishment of the mechanism contains the value pursuit of law in fairness and order.In the legal connotation of the fault-tolerant mechanism of independent directors,the author defines the research scope of the article by comparing and distinguishing the fault tolerance and exemption.In the third part,the author analyzes the current situation and existing problems of the fault-tolerant mechanism of independent directors in China from three dimensions of legislation,law enforcement and justice.Through researching the relevant laws and regulations,it is found that there are some problems in independent directors’ legislation,such as single fault tolerance mode,low legal rank and ambiguous identification of the duty of diligence;By studying the cases of the CSRC,it is concluded that the independent directors’ judgment standard of the duty of intelligence and the scope of the punishment object is unclear,and the punishment which lacks of the exemption of liability is excessive.Through studying the judicial case of the liability of independent directors in China Judgement Online,it is concluded that there are still some problems in the judiciary,such as the excessive amount of individual compensation,the judges’ failure of the verification obligation and the lack of consistency of the fault-tolerant standard.The fourth part introduces the practice of the fault-tolerant mechanism of directors in western developed countries,and puts forward the corresponding reference and abandonment according to the authentic situation in China.By analyzing the business judgment rules represented by the common law system and the liability restriction and exemption system of directors represented by the civil law system,the author holds the view that the introducing principles of business judgment does not conform to China at this time,and they should be boldly abandoned in the construction of fault-tolerant mechanism of independent directors.The limitation and exemption system of directors’ liability is consistent with the situation of our country and can be used for reference optionally in the construction of the system,but the minimum liability of independent directors should be determined by our country independently.The fifth part is the focus and core of the dissertation.The author divides the faulttolerant mechanism of independent directors into three dynamic operative processes.And the dissertation discusses the specific ways of constructing the fault-tolerant mechanism of independent directors from three aspects: optimizing the identification and judgment of the duty of diligence,improve the liability system of independent directors,and constructing the liability compensation mechanism of directors and the related supporting measures of fault-tolerance.