In China, most independent directors have no real power, and their role is to show them to the CSRC. But if it's one of our own, we can either make some agreements with them. Independent directors cannot serve in the company. If the second largest shareholder does not work in the company, he can be an independent director.
What's the use of independent directors?
An independent director of a listed company refers to a director who does not hold a position other than a director in the company, and the listed company and its major shareholders who hold the position cannot hinder his independent and objective judgment. Independent directors have the obligation of honesty and diligence to listed companies and all shareholders. Independent directors shall, in accordance with the requirements of relevant laws and regulations, these Guidelines and the Articles of Association, earnestly perform their duties, safeguard the overall interests of the company, and pay special attention to the legitimate rights and interests of minority shareholders. Independent directors shall perform their duties independently and shall not be influenced by the major shareholders, actual controllers or other units or individuals with interests in the listed company. In principle, independent directors shall concurrently serve as independent directors in at most five listed companies, and ensure that they have enough time and energy to effectively perform their duties. Domestic listed companies shall amend their articles of association in accordance with the requirements of the Guidelines, and employ appropriate personnel as independent directors, including at least one accounting professional.
To sum up, an independent director refers to a director who is independent of the company's shareholders, does not work in the company, has no important business or professional contact with the company or its management personnel, and makes independent judgments on the company's affairs.
Legal basis:
Article 22 of the Company Law of People's Republic of China (PRC)
Resolutions of the shareholders' meeting or the shareholders' meeting or the board of directors of the company are invalid if they violate laws and administrative regulations.
If the convening procedure and voting method of the shareholders' meeting, shareholders' general meeting or the board of directors violate laws, administrative regulations or the articles of association, or the contents of the resolution violate the articles of association, the shareholders may request the people's court to cancel it within 60 days from the date of making the resolution.
Where a shareholder brings a lawsuit in accordance with the provisions of the preceding paragraph, the people's court may, at the request of the company, require the shareholder to provide corresponding guarantees.
If the company has gone through the registration of change according to the resolution of the shareholders' meeting or the shareholders' meeting or the board of directors, after the people's court declares the resolution invalid or cancels the resolution, the company shall apply to the company registration authority for cancellation of the registration of change.