獨(dú)立董事制度我國(guó)公司治理發(fā)展的新篇章--外文翻譯

1、外文翻譯Independent Directors: A New Chapter of the Development of Corporate Governance in ChinaMaterial Source: JIANQIAO UNIVERSITY Author: Helen Wei HuThis paper examines the development of corporate governance

2、in China, with a focus on independent directors. Corporate governance is regarded as the core of the ongoing State-Owned Enterprises (SOEs) reform, and the newly introduced independent director system is viewed as a revo

3、lutionary change to the Chinese corporate governance development.This paper analyses the characteristics of independent directors in the Chinese context, proposes five internal factors that would affect independent direc

4、tors’ performance, namely independence, remuneration, qualification, assurance and autonomy. It is suggested that these factors are essential for independent director system to work effectively, and hence will lead to be

5、tter board performance.1 IntroductionChina launched a major economic reform and liberalisation program in 1978, which transformed the planned economy to a market economy. Since then, the reform of state-owned enterprises

6、 (SOEs) has been considered the key to the success of China's economic growth. In 1992, the Chinese government reformed its SOEs through corporatisation, and the concept of “modern enterprises” was introduced accordi

7、ngly. During this process, the separation of state ownership and control was adopted, and company managers were granted fourteen control rights in July 1992. However, with increased managerial autonomy and unclearly defi

8、ned property rights, the agency problem of Chinese managers was more serious than that in Western countries.Insider control problems occurred during the SOE reform. Examples of these problems include collusion between ma

9、nagers and workers; transferring firm assets from the state-owned enterprise to non-state-owned enterprise; tax evasion and corruption among SOEs’ managers, and ultimately led to poor firm performance. In fact, the exist

10、ence of insider control problem can be explained by the fundamental principle of agency theory, which is the conflict of interests between the principal (owner) and the agent (manager). Hence, an effective control mechan

11、ism needs to be country’s economy. In August 2001, the China Securities Regulatory Commission (CSRC) released the “Guidelines for Introducing Independent Directors to the Board of Directors of Listed Companies” (CSRC, 20

12、01; hereafter referred to as the “Guideline”) to strengthen the importance of board independence, and protect the interests of nearly 60 million Chinese shareholders. Four months later, the “Code of Corporate Governance

13、for Listed Companies in China” (CSRC, 2002; hereafter referred to as the “Code”) was introduced to further speed up the development process, and hence improve individual company’s corporate governance practice.After intr

14、oducing the independent director system, the remaining question is, “Will firm have better performance by having independent directors on the board?” Studies from the West show that there are some controversial views on

15、the effectiveness of board independence in relation to firm performance.On the one hand, some researchers agree that independent directors do have a positive relationship on firm’s corporate performance. Early work by Fa

16、ma and Jensen contends that independent directors provide a means to monitor management activities through an increased focus on firm financial performance. Lee, Rosenstein and Rangan support this view, provide evidence

17、that boards dominated by outside directors are associated with higher returns than those dominated by insiders. Similarly, Pearce and Zahra point out that there is a positive correlation between the proportion of indepen

18、dent directors and firm financial performance. Baysinger and Butler report that changes in board composition over a ten-year period from 1970s to 1980s appear have a causal relationship with accounting performance. In ad

19、dition, Millstein and MacAvoy find a statistically significant relationship between active, independent boards and superior firm performance.On the other hand, Furthermore, Rosenstein and Wyatt argue that insiders are mo

20、re effective because they have superior knowledge of the firm and its industry than outside directors, and they are just as diligent as outside directors, given their legal responsibilities and their own interests in the

21、 firm. Similarly, Bhagat and Black also state there is no convincing evidence suggesting that greater independence results in better performance, but some evidence shows that firms with supermajority independent director

22、s perform worse than others.From the above discussions, it is obvious that scholars have not reached a consensus view of the board composition in the corporate governance literature. Moreover, the importance of independe