Responsibility orientation is the basis for independent directors to effectively perform their duties. From the background of the introduction of independent directors in China at the end of 1990s, the introduction of independent director system is to improve the corporate governance structure, limit the bad behavior of major shareholders and protect the interests of small and medium investors. From the legislative purpose, whether it is the expression of independent directors' duties in the Guiding Opinions, or the performance requirements of independent directors in the Governance Standards of Listed Companies and Several Provisions on Strengthening the Protection of Shareholders' Rights and Interests of Social Public Shares, they are all aimed at safeguarding the interests of listed companies and paying attention to the legitimate rights and interests of minority shareholders. In addition, from the requirements of the stock exchange for independent directors, it is also required that "independent directors should fully understand the basic principles of corporate governance, the legal framework for the operation of listed companies, the duties and responsibilities of independent directors, the information disclosure of listed companies and the supervision of related transactions, and have the awareness of internal control and risk prevention and the basic ability to read and understand financial statements". All these three aspects show that the position of the supervisory layer on the duties of independent directors of listed companies is "supervision and checks and balances". In view of the fact that many companies regard independent directors as "consultants", it is necessary for the regulatory authorities to further clarify the responsibilities of independent directors and strengthen their regulatory responsibilities.
(2) Improve and perfect the mechanism for selecting and appointing independent directors.
Independence is the premise and foundation for the existence and function of independent directors. The questionnaire survey shows that 19.8% people think that the way of nomination and selection of major shareholders has a great influence on the independence of independent directors, 40.4% people think it has some influence, and 39.8% people think it has no influence at all. In the topic of "the relevant laws and regulations of independent directors in listed companies need to be further improved", the highest score is "the selection and appointment mechanism of independent directors needs to be further adjusted and improved", which means that the interviewees believe that the selection and appointment mechanism is the most urgent need to be adjusted and improved in the current independent director system.
The following ways or combinations of the following ways can be considered in the reform of the selection and appointment mechanism: First, the withdrawal system of major shareholders, that is, when the board of directors nominates candidates for independent directors, the directors representing the first and second largest shareholders must withdraw, and then the general meeting of shareholders will hold a differential election. The second is the minority shareholder nomination system, that is, minority shareholders nominate candidates for independent directors, and then they are elected by the shareholders' meeting. The third is the nomination system of the Nomination Committee of the Board of Directors. That is, referring to the practice of selecting independent directors in the United States, the nomination right of independent directors is granted to the nomination Committee of the board of directors composed of independent directors, and the nomination policy of independent directors is fully disclosed. Fourthly, self-regulatory organization recommendation system, that is, China Association of Listed Companies establishes a talent pool of independent directors. According to the application of listed companies, independent directors are recommended for listed companies according to a certain multiple, such as three times the number of applicants of listed companies, and then candidates are elected by the shareholders' meeting. Although the first three methods can solve the problem of independence of independent directors to a certain extent, they can't solve the problems of poor channels for selecting and appointing independent directors and difficulty in finding suitable candidates. Among them, the third method is only applicable to the case of selecting and appointing successor independent directors. The fourth way can solve the two problems of employment channels and independence at the same time. In practice, China Securities Association can cooperate with local listed company associations to work together. China Association of Listed Companies is mainly responsible for establishing and maintaining the talent pool of listed companies, formulating the recommendation standards for independent directors, and managing the recommendation work in a unified way. The local association of listed companies is mainly responsible for recommending candidates for independent directors of listed companies in their respective jurisdictions.
(3) Improve the way of granting allowances to independent directors.
According to the questionnaire survey, 24.5% people think that the current subsidy payment method has a great influence on the independence of independent directors, 42.9% people think it has some influence, and 32.6% people think it has no influence at all. During the investigation, some listed companies and independent directors suggested that the company could be allowed to pay the independent directors' allowance to the independent directors' professional committee established by Shanghai Association of China or Shanghai Association of China, and then the independent directors' allowance would be paid by Shanghai Association of China or the independent directors' professional committee. On this basis, an independent director compensation fund can also be established. On the one hand, it can be used to establish a guarantee mechanism for independent directors and provide relief and legal aid for independent directors' subjective obligations; On the other hand, an incentive mechanism for independent directors can also be established to reward independent directors who perform their duties well. It should be noted that the allowance for independent directors is paid by the China Association for the Promotion of Directors or the Committee of Independent Directors, and the ultimate source of the allowance is still listed companies. The actual effect remains to be further demonstrated. In addition, some experts in the survey suggested that the high allowance for independent directors would have a greater impact on the independence of independent directors, and suggested that the China Council for the Promotion of International Trade or the Committee of Experts of Independent Directors issue relevant regulations to limit and guide the upper limit of the allowance for independent directors.
(4) Establish and improve the evaluation and accountability mechanism of independent directors.
At present, the reputation of "vase director" and "signature director" makes the credibility of independent directors questioned. Independent directors do not distinguish between good and bad, lack of supervision and evaluation of market forces, and lack of incentive and restraint mechanisms, which leads to the decline of independent directors' sense of responsibility, professional quality and ability to perform their duties, which is not conducive to rewarding the good and punishing the bad, and giving full play to the role of the independent director system. In the questionnaire survey, among the seven factors that affect independent directors to fully perform their duties, "insufficient constraints and lack of relevant accountability and evaluation mechanisms" scored the highest. Therefore, the evaluation and accountability mechanism of independent directors should be established as soon as possible to promote their diligence. During the investigation, listed companies and independent directors suggested: (1) The board of supervisors of the company should conduct an annual assessment of independent directors according to their actual work situation and annual debriefing report, and submit it to the shareholders' meeting for deliberation; (2) On the basis of the Guidelines for Independent Directors of Listed Companies, China Shanghai Association has formulated the performance evaluation criteria for independent directors, conducted performance evaluation for independent directors, and published them regularly; (3) China Shanghai Association shall establish the integrity files of independent directors, and include the independent directors who violate the integrity or neglect their duties in the integrity files. In addition to reporting to the regulatory authorities and making it public, it is also necessary to formulate relevant self-discipline punishment systems and punish them in a self-discipline manner.
(V) Further clarify and refine the responsibilities of independent directors.
In the questionnaire survey, in terms of the independent director system that needs to be adjusted and improved, "the job responsibilities of independent directors need to be further refined and clarified" was selected as the second place by the respondents, second only to the selection mechanism. During the investigation, listed companies and independent directors suggested that China Shanghai Association issue the Guidelines for Independent Directors of Listed Companies as soon as possible, so as to further clarify the rights, obligations, discussions and work processes of independent directors, provide detailed and specific reference and guidance for independent directors to perform their duties, and promote independent directors to perform their duties comprehensively and effectively. China Association of Listed Companies will play the role of a self-regulatory organization, continuously follow up and study the status quo of the independent director system, constantly improve and innovate the performance practice of independent directors, and give comprehensive guidance.
(VI) Strengthening the service and daily management of independent directors.
Since the establishment of the independent director system 10 years ago, the independent directors of listed companies in China have developed into a huge group of 6,000 to 7,000 people and become an elite gathering group that cannot be ignored in the securities market. In the survey, many independent directors reflect that the particularity of independent directors' identity determines that they are a group that is not only free from the listed companies where they work, but also loosely connected with each other. Independent directors lack a sense of organizational belonging and a fixed channel to reflect their demands. Independent directors urgently need the association of listed companies to set up a self-regulatory service agency for independent directors as soon as possible. While building a communication platform for independent directors, we should strengthen the guidance and daily management of independent directors, constantly improve the quality and ability of independent directors to perform their duties, and avoid damaging the reputation of the entire independent director because of individual "black sheep" behavior. China Association of Listed Companies can rely on the professional committee of independent directors to provide one-stop service and management for independent directors, namely, certification and continuous training for independent directors, establishment of talent pool for independent directors, preparation of work guidelines for independent directors, performance evaluation of independent directors, etc., so as to promote the healthy development of independent directors.
To sum up, the survey shows that the independent director system of listed companies in China has played an active role in improving the governance and quality of listed companies and protecting the rights and interests of small and medium-sized investors for more than ten years. Although there are some shortcomings in the implementation of the system, I believe that through the continuous improvement and perfection of relevant systems, independent directors will play an increasingly important role in the standardized development of listed companies in the future.
(Excerpted from the performance report of independent directors of listed companies)