A Comparative Review of Independent Director Systems in China and Abroad

DOI

10.2991/978-94-6463-770-0_74How to use a DOI?

Keywords

Independent Director; Corporate Governance; Comparative Institutional Analysis; China-U.S. Comparison; Accountability Mechanisms

Abstract

Independent director systems have been widely adopted globally as a key corporate governance mechanism. The independent director system serves as a critical governance mechanism to mitigate principal agent conflicts, enhance corporate transparency, and protect minority shareholders’ interests. This paper conducts a comparative analysis of the institutional evolution and functional effectiveness of independent director systems in China and abroad (mainly focusing on the USA). By tracing historical trajectories, the study reveals divergent developmental pathways: the U.S. system evolved through crisis-driven regulatory reforms, transitioning from advisory roles to shareholder-centric monitoring frameworks, while China’s system emerged via policy experimentation and legal hybridization, integrating global best practices with domestic regulatory needs, embedding imported norms within its Party-led governance structure. Key findings highlight structural contrasts between the two systems— such as China’s dual oversight system (independent directors and supervisory boards) versus the U.S.’s single board model and identify persistent challenges, including role ambiguity, accountability-reward dissonance, and institutional redundancy in China. Empirical evidence from landmark cases (e.g., the Kangmei scandal) underscores systemic vulnerabilities in China’s implementation. The paper explores future trends, advocating for the modernization of nomination mechanisms, eco- nomic interest decoupling, and systemic risk mitigation. These insights contribute to understanding the contextual contingency of governance frameworks and offer policy recommendations for institutional convergence and functional optimization. Overall, this comparative review highlights the need for tailored governance reforms that balance global standards with local contexts.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Zihan Wang
PY  - 2025
DA  - 2025/06/26
TI  - A Comparative Review of Independent Director Systems in China and Abroad
BT  - Proceedings of the 2025 3rd International Conference on Digital Economy and Management Science (CDEMS 2025)
PB  - Atlantis Press
SP  - 646
EP  - 660
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-770-0_74
DO  - 10.2991/978-94-6463-770-0_74
ID  - Wang2025
ER  -