Independent Director Mechanism

Independent directors were first born in the United States,which was caused by the shift from shareholder-centrism to board-centrism,and then the problem of management leaving control,that is,the separation of managem ent right and ownership.Independent directors were born to supervise the man agement’s behavior,so as not to harm the interests of shareholders.Since China’s independent director system was introduced to China for more than 20 years,it has been favored by the government,and it has made great strides in legal norms.However,this does not mean that it has a proud record,but it is in effective and controversial.The logical approach followed in this paper is: "askquestions,analyze problems and solve problems".Mainly around the whole system framework of independent directors,combing the relevant laws and regula tions,and combining with the performance effect of independent directors in pr actice,this paper makes a theoretical analysis of the failure of independent dir ectors,finds out the reasons and problems,and finally puts forward some sugg estions for improvement.There are four main parts in this paper.The first partintroduces the independent director system,reviews the development and evolu tion at home and abroad,and points out that its theoretical basis and core is independence.The second part analyzes the rights and obligations of independe nt directors.The third part is the operational defects of independent directors.Including non-independence,overlapping with the supervisor’s authority,limited exercise and harsh responsibilities.This part carries out the analysis of legal norms and case studies,and finally points to a problem,that is,the reason whyindependent directors are "willing to be vases".The fourth part puts forward some suggestions for many problems of independent directors.The fourth part is based on the company contract theory and the principal-agent relationship be tween independent directors and listed companies.Different from ordinary directors being added with an administrative relationship,independent directors are external equal entrustment relationships.The failure of independent directors consumes governance cost,which is solved by contract arrangement first,specifically by entrusting content to solve the problems faced by independent directors.It is pointed out that this method is efficient instead of being lazy because of autonomy of will.Independent directors are more motivated to perform their duties,the contents of their duties are clearer,and the consequences of their duties are more legal and practical.