Research On The Impact Of Rookie Independent Directors On The Stock Price Crash Risk

With the continuous promotion of financial supply-side reform,China has introduced a series of policies to promote the development of direct financing,such as the establishment of science and technology innovation board,registration system reform,etc.In the 2019 government report,it was also proposed to increase the proportion of direct financing.In this context,China’s capital market is developing rapidly,the number of listed companies is surging,and the number of independent directors is also increasing.However,according to the Guidelines on the Performance of Duties of Independent directors of Listed companies,independent directors "can concurrently serve as independent directors in no more than five listed companies".Therefore,more and more new independent directors who have no work experience in the board of directors and take the position of independent directors for the first time participate in the capital market.From 2008 to 2020,about 28.9% of the independent directors hired by listed companies are new independent directors,and in about 18.1%of companies,new independent directors account for more than half of the independent directors.So will the large scale of new independent directors affect corporate governance? We discuss the governance function and mechanism of the new independent directors from the perspective of stock price collapse risk which has a significant impact on the capital market and investors and can comprehensively reflect the supervision effect of the new independent directors.After constructing the theoretical framework of the impact of emerging independent directors on stock price crash risk,this paper uses empirical methods to test the relationship between emerging independent directors and stock price crash risk in A-share listed companies from 2008 to 2020.Empirical studies have found that talent alone contributed to the company the future stock price crash risk,dong in the instrumental variable inspection,tend to score matching,rookie alone change,control of a series of unique dong dong personal characteristics,such as a variety of organic processing,and to account for variable change and be explained variable measure,adopting more robust standard error of the algorithm and other robustness after inspection,the conclusion remains valid.Further research shows that when the new independent directors have industry expertise,are not very busy,have academic background,have overseas experience and face more strict legal environment,the positive impact of the new independent directors on stock price crash risk is weakened.The mechanism test shows that the new independent directors raise fewer objections,although they participate more actively in the board of directors.The new independent directors reduce the readability of the company’s annual report,increase the financial restatement,reduce the quality of the company’s information disclosure,and ultimately increase the risk of stock price collapse.The results of this paper show that the poor independence and lack of experience of the new independent directors weaken the supervision of the major shareholders and the management,encourage their selfinterest and opportunistic behavior,and increase the possibility of the company’s stock price crash in the future.From the perspective of emerging independent directors,this paper has enriched relevant literature on the impact of board governance structure on stock price crash risk.Secondly,it reveals the important economic consequences of a new independent director from the perspective of stock price crash risk,thus enriching the relevant literature of the new independent director.Finally,the conclusion of this paper provides empirical evidence and useful reference for companies and regulators.