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3. Be lack of the exterior environment of independent director system in China
On theory, the independent director system can’ t take effect（21）since no economic conflict no restriction. But the reason why the system can take effect on the corporate governance is that the exterior circumstance －the developed market of the stock and the human resource.
In America and British, the stock market is highly developed, and the high liquidity of the stock makes the small stockholders can “vote by foot” to elect or dismiss the independent directors and managerial staff. Furthermore, the market of the professional managers stimulates the hard work of
But in China, the stock market is characterized by the limited liquidity of the stock. （22） And the stockholders can’t elect the managerial staff through closing out their stock. That is to say the stock market can’ t play its real role in the corporate governance. And that the market of the human resource haven’ t come into being. So, in China the independent director system is lack of exterior circumstance.
Some Proposals
The problem of public corporate governance in China can be solved in the existing legal frame by improving the supervisory board and reform the structure of the shareholders.
China’ s public corporate governance include the supervisory board whose duty is also to supervise the behavior of the managerial staff comprising the directors and other mangers. And the reason why the supervisory board can’ t make effect on the supervising of the managerial staff is that the supervisory board doesn’ t have enough power to supervise the manager and enough qualified staff, according to the COMPANY LAW.（23）
I think the supervisory board as the supervisory organ is best suitable to Chinese publicly held corporate, because 1) it is coincided with the model of corporate governance which has been existing in China for a long time and is proved to be suitable to Chinese corporate by the practice; 2) it is coincide with the tradition of the enterprise governance（24）which is the predecessor of most of the publicly held corporations, the representative meeting of the employees, since the supervisory board ispartly composed of the representatives of the employees; 3) the supervisory board is partly composed of the representatives of the small and the medium shareholders who have economic conflict with the large holders which can stimulate them to do their best to supervise the managerial staff representing the large shareholders, so perhaps the small shareholders is the suitable nominees to supervise the managerial staff.
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