Corporate governance (gongsi zhili) is a concept whose time has come in China, and the institution of the independent director is a major part of this concept. Policymakers in several countries such as the United Kingdom and Japan have turned to independent directors as an important element of legal and policy reform in the field of corporate governance. In August 2001, the China Securities Regulatory Commission (CSRC) issued its Guidance Opinion on the Establishment of an Independent Director System in Listed Companies. Covering all companies listed on Chinese stock exchanges (but not Chinese companies listed overseas), it constitutes the most comprehensive measure taken to date by the CSRC - or indeed by any Chinese governmental authority - to regulate internal corporate governance through the institution of the independent director. This article discusses the institution of independent directors, and the Independent Director Opinion specifically, as a potential solution to Chinese corporate governance problems. It begins by discussing special features of the Chinese corporate landscape and the most prominent problems in the area of corporate governance. It then proceeds to identify differing conceptions of what is broadly termed the independent director - the outside director, the disinterested director, and the (more narrowly defined) independent director - and discusses the approaches taken in several different jurisdictions. The article canvasses empirical research on the relationship between independent directors and corporate performance in the United States, as well as in China, and finds that the research yields similar conclusions: there is no strong link. The article concludes by arguing that proponents of the institution of independent directors misconceive the nature of the corporate governance problem in China, as well as the functioning of independent directors in the United States, and have not taken into account specific features of the Chinese institutional environment - particularly the legal environment - that affect the viability of any proposed solution.

Seminar paper from the year 2010 in the subject Law - Comparative Legal Systems, Comparative Law, grade: A+, Vanderbilt University (Law School), language: English, abstract: The “independent director” has become a centerpiece of modern corporate governance. However, the concept of “independence”, and the ability of independent directors to fulfill their roles, remains deeply problematical. In the course of the discussion on the proper role of independent directors that unfolded in Europe and the United States during the 1980s and 1990s and peaked in the wake of the Enron scandal, rules on director independence have found their way to the corporate governance regimes of developing countries that turned their head to western economies. Particularly in China and India, independent directors have taken their place on company boards, earning mixed responses from the academic and business community. What is the current state of Indian and Chinese rules on director independence? What tensions do they address and create? And what can be done to optimize the achievement of their objectives? The goal of this article is to examine the status quo of director independence in the two countries, to put the regulations into their historic and political context, to summarize practical experiences with the new institution, and to point to possible future developments.

China is an increasingly influential emerging economy that is currently attracting the attention of academics, practitioners, and policy makers. This book is a collection of cutting edge research findings on issues relating to the experiences and challenges of China's capital market development.

The first in-depth analysis of the independent director in Asia: who they are, what they do and how they are regulated.

As China has aligned itself more closely with the international economy, it has also sought to adopt more Western-style corporate governance mechanisms. This report provides an overview of overview of corporate governance mechanisms in China, as well as an examination of continuing challenges and policy implications.

The structure of this article is as follows: Part II will provide a brief history of the Chinese Economic Reform Era and the basic structure of the Chinese Company Law, and then discuss the legal framework about independent directors in Chinese corporate law. Part III will focus on structural issues of Chinese corporate governance and recent changes, including the modernization of state-owned enterprises, the banking sector, and the stock market. It will highlight the difficulties as well as the possibilities that this mechanism faces in a broader context. Part IV will analyze several different surveys on the results of this new legal design. This section will provide a more comprehensive view on the implementation of the independent director mechanism after its first decade in China. Also, the critiques of this new mechanism will be examined and assessed. Part V begins with an analysis of the core governance issues China is dealing with today and to what extent the current independent director mechanism is helping to solve those issues. After discussing its current ineffectiveness, this section will propose two possible models in which independent directors can play a role as social, economic, and political conditions continue to evolve in China. The purpose of this analysis is to help answer the question of whether the independent director mechanism is a reasonable choice in light of the current conditions in China and to suggest possible strategies to maximize its efficacy. Part VI will briefly conclude this article.