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Independent director system in China has been "on the road"

Author: MaTongBao From: www.yourpaper.net Posted: 2009-05-28 23:08:24 Read:
[Abstract] In this paper, the analysis of the Performance of Independent Directors of Listed Companies in Shanghai in 2007 to clarify the independent director system in China has played an important role.
[Words] of Independent Director System; independent directors; important role

2007 Performance of Independent Directors of Listed Companies in Shanghai

(A) attendance at the meetings overall analysis
862 Shanghai-listed companies have been disclosed in the 2007 Annual Report, a total of 679 independent directors, which has been arrived at after charging 562 people part-time factors. The independent directors of a company listed on the Shanghai Stock Exchange to attend the meetings of the Board of Directors is generally good, commissioned to attend and absence accounted for only 7.17% of the total, in particular, the absence of independent directors has been controlled at a low level. With the constant improvement of the independent director system, in particular the strengthening of the independent directors' duties and responsibilities, currently serves as an independent director is not very prominent, and the combination of independent directors to attend meetings of the Board, did not affect the number of employed attendance at board meetings of the independent directors.
(2) independent directors challenge overall analysis
862 Shanghai-listed companies have been disclosed in the 2007 Annual Report, a total of 26 of 40 independent directors on matters related challenge, accounted for 3.01% of the total number of listed companies in Shanghai stock market has been disclosed in the annual report as well as the total number of independent directors 1.5 %. Objection trips and events, during 2007 a total of 54 people 37 issues challenge. Among them, the objection raised more than three times three. Independent directors to challenge matters the category of foreign investment matters (including the new capital increase, assign, or transfer of equity) is the largest challenge for 21, accounting for 56.76% of the total; appointment of Directors for executives and remuneration matters raised objections 6, accounting for 16.22% of the total; and three periodic report and its summary of matters raised objections; and two external guarantee to mention objection; other matters (including credit and debt settlement agreement , accounting treatment, etc.) 5.
(C) independent directors to challenge the characteristics of
Part of the independent directors have begun to get rid of the "rubber stamp" role, and the courage to express opinions independent and objective judgment. Example, bonded Technology (600794), the vote of the Company held on November 16, 2007, the eighth meeting of the Board of Directors in 2007 and Dali Paper Company "settlement agreement" signed by Dali mills tripartite consultation motion, independent directors Pengliang Bo Xue Lei abstained from voting for and against. According to the company's disclosure, Independent Director Peng Liangbo abstained reason to be elected as the Company's independent directors, inform amount is the company's debt, rather than the amounts payable to the Dali settlement agreement, also known to solve the company debt, before and after the statement is inconsistent, it is difficult to make judgments. Independent director Xue Lei is directly voted against it, and clearly expressed the view that, bonded technology the papermaking company formerly Dali in Dali paper mills, equity transfer did not actually carry out the paper business, there is no reason to produce so much rent and operating expenses He therefore requested the relevant persons responsible for this to make a detailed analysis and, where possible, to avoid possible loss, and the consideration of the judicial process further possible.
Part of the independent directors can be combined with the company's specific business situation, safeguard the interests of the Company and its shareholders, make prudent decisions on the company's major foreign investment matters, and fully reveal the potential risks of the investment project to market investors, played a prompt market attention an important role.
For example, Ningbo United Board of Directors of the Company in 2007 second extraordinary meeting examined and agree that Subsidiaries the Shengsi Long Beach, Far East Development Co., Ltd. Ningbo Construction and Development Co., Ltd. Investment and Development Co., Ltd. holds a price of 130 million yuan transferee Shanghai Wang Ning accounted registered capital of 80% of the shares. But independent directors Wang Aiwu in the vote voted abstention, in his view, the Far East Long Beach Resort project area is located in the island, compared to onshore projects, traffic, weather and other constraints will lead to a bigger project risk. Taking into account the project total investment of over 10 billion yuan, if the poor sales of the project, such tourist resort project may fall into a dilemma situation, the scale of funds used will be a substantial increase in the internal implementation of the project team, management mechanism, first-line management team confidence in the project have not been able deep understanding of the project and therefore can not make a clear professional judgment. "Therefore, as a precautionary measure, the independent directors of the final motion to abstain from voting. In another example, two independent directors of Harbin High-Tech Company Wangbing Li, Zhu bolt motion for technical cooperation with Bio-Pharmaceutical Co., Ltd. Suzhou Lan Ding objection, and voiced the opinion that the project required a large amount of funds, long investment cycle , high technology content, technology and staff Harbin High-Tech White Swan Pharmaceutical Group Co., Ltd. does not currently have the ability to undertake the project.
In the case of the absence of relevant information, in particular the professional advice of intermediaries, some independent directors can not indiscriminately, not arbitrarily rejected the initiative to abstain from voting.
For example, Juhuagufen means of communication in the March 14, 2007-third of the Board held 20 meetings, independent Directors ZHU Rong'en, the company acquired Zhejiang Jubang high-tech Co., Ltd. 16.67% stake in the motion be abstained because the company failed to provide Jubang audit and evaluation reports and therefore can not make judgments. Another example, SST magnetic card in the the fourth Extraordinary Meeting of the Board of Directors held on March 6, 2007, Jin-Sheng Liu was appointed as the Deputy General Manager of the motion, the three independent directors Xu Jie, Luo, Liu Jizhong due to the Board to appoint Liu Jinsheng deputy general manager of the reasons is too simple and abstain from voting.
4 individual independent directors on the matters related to collective objection from one side reflects the existing contradictions in the operation of the internal as well as specific matters and risks, to pass an important signal to market investors.
Xin Network Video four independent directors in 2007, the company submitted to the Board for consideration of the motion and other matters raised three objections. In consideration at the 17th meeting of the third session of the Board held on October 19, 2007 on the company hired the convertible merger intermediaries motion SHEN Lian-feng, independent directors rejected the motion. In 18 of the third session of the Board meeting held on October 22, 2007 to consider the motion on the company hired the convertible merger intermediaries, independent directors Pingjun Wen motion veto. Third, in the twenty-second meeting of the third session of the Board held on December 14, 2007, to consider the "Nanjing Xin Network Video Technology Co., Ltd. Convertible merger on the Grand Horizon Information Technology Co., Ltd., Shanghai Sunstar Communication Technology Co., Ltd. , Limited Shanghai Xin Min communication technology motion, "Xin Network Video Technology Co., Ltd., Nanjing, convertible merger with the Grand Horizon Information Technology Co., Ltd., Shanghai Sunstar Communication Technology Co., Ltd., Shanghai Welcomes China Communication Technology Co., plan instruction manual motion of the (draft) "," Xin Network Video Technology Co., Ltd., Nanjing merger on the Grand Horizon Information Technology Co., Ltd., Shanghai Sunstar Communication Technology Co., Ltd., Shanghai Welcomes China Communication Technology Co., motion of the merger agreement, "the surviving company the draft charter motion, motion on the convening of the 2007 second extraordinary general meeting of the company's motion "5, four independent directors of the Company Gu Hande, Wang Kaitian Pingjun Wen, Shen Lian-feng All of the above motion cast a veto.

Second, the independent director system in China has been "on the road"

Whether the independent director system in China to play its due role? Someone replied: "no." Through the above analysis, the response, I can not agree. Independent director system in China although there are still a lot of much-needed improvement, but she has already played an important role in the 30 years of reform and opening up China's enterprises to catch up with international important step.
In the 1990s, China's listed companies exposed whitewash report, providing false information, manipulate profits, misleading investors and other issues, aroused the indignation of the people. The majority of investors due to the dominance of the internal control, the phenomenon of frequent related party transactions, the sharp criticism. In the face of such environment, China Securities Regulatory Commission determination of the independent director system, to strengthen supervision, improve the governance structure of listed companies, listed companies to promote the standardized operation and healthy development, thereby protecting the legitimate rights and interests of the majority of investors, especially minority shareholders. 1993 Qingdao Beer issued H shares and set up two independent directors in accordance with the relevant provisions of the Hong Kong securities market, thus becoming the first domestic company to introduce independent directors. 1997 Securities Regulatory Commission issued the "Articles of Association of Listed Companies Guidelines states:" needed, you can set up an independent director. "1999, the State Economic and Trade Commission and the Securities and Futures Commission jointly issued the" views on further promotion of overseas listed companies standardize Operations and Reform " overseas listed companies to have independent directors. 2000 Economic and Trade Commission put forward in large corporate enterprises should gradually establish a system of independent directors. In the same year, the State Council forwarded the "state-owned large and medium-sized enterprises to establish modern enterprise system and strengthen the management of the basic specification (Trial)", the Board formally proposed the establishment of non-company shareholders and not working within the company's independent directors. August 16, 2001 Securities Regulatory Commission issued "guidance" requirements: June 30, 2002, the board of directors shall include at least two independent directors on Establishing Independent Director System in Listed Companies; 30 June 2003 Recently, members of the board of directors of listed companies should include at least one-third independent directors. Which opened the independent Directors are fully embarked on the prelude to the stage of China's listed companies. In the existing system environment, the independent director system in China has played an important role.
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