Study on the incentive system of independent directors

In China, due to the lack of the reputation incentive system, the salary system for independent directors plays an important role in improving the corporate governance. In this paper, the salary system for independent directors is thought of as an issue of the formation of equilibrium price in the process of market transaction. Then, this paper indicates that since the formation of our independent director mechanism is passive, only if restructuring the incentive system, can our corporate governance structure be improved.