Research on the effect of independent director system on shareholder's interest conflicts in public company

Abstract

In China, the independent director system has a history of practice of ten years. On the implementation effect, opinions are widely divided. Through a game theory analysis on public company's policy to employ independent directors and independent directors' strategies when faced with interest conflicts between majority and minority shareholders, conclusions were drawn. Nowadays, to give full play to the independent director system, independence of the independent directors should be ensured first, which calls for outside interference. Independency of independent directors subjects to the degree of perfection of the independent director system. On the stage of appointing independent directors, situations should be analyzed and approaches be made to ensure that the independent directors do their duties, so that shareholders' benefits can be protected. © 2011 Springer-Verlag Berlin Heidelberg.