The Arrangement of Independent Board Director and Protection of the Interests of Small Stockholders

although the arrangement of independent board director in corporate governance can protect in a sense the interests of small stockholders in the listed companies from erosion,we cannot rely on the arrangement too much.Firstly,the independent board director is also an economic man,who must abide by utility maximization and some conditions,and hence whose interests cannot be completely compatible with those of the small stockholders.Secondly,confined by the decision-making process of board of director,the independent board director bears only a limited and weak motive to protect the interests of small stockholders from erosion.The author argues in the paper that the following key points must be focused on to deal with this issue:1)perfecting the law of protection of the small stockholder's interests,esp.,the regulation of the deadline for listed companies to disclose the important information on their business;2)reducing the shares of the big stockholders in order to retrain the stockholders by themselves;3)punishing heavily both the corporation itself and the natural men in the listed companies when erosion of stockholder's interests are found.