The Strange Role of Independent Directors in a Two-Tier Board Structure of China's Listed Companies
National University of Singapore (NUS) - Faculty of Law
Compliance and Regulatory Journal, Vol. 3, pp. 47-55, 2008
The independent director system came to China from the common law family, aiming to boost the corporate governance of Chinese listed firms. This article analyses the effectiveness of independent directors, with particular reference to the supervisory board in China. The effectiveness is evaluated by examining the legal framework, historical path, and empirical studies on both the effects and practices of these two organs. It argues that, compared with the supervisory board which can be regarded as a complete failure, the independent director system has made certain limited contributions the improvement of China's corporate governance. However, certain important reform measures should be implemented to enhance the independence of these directors and provide them easier access to corporate information and other facilities.
Number of Pages in PDF File: 12
Keywords: China, corporate governance, independent directors, company law
JEL Classification: G3, K22
Date posted: April 29, 2008