【正文】 ence results in better performance, but some evidence shows that firms with supermajority independent directors perform worse than others. From the above discussions, it is obvious that scholars have not reached a consensus view of the board position in the corporate governance literature. Moreover, the importance of independent directors as a governance mechanism to protect shareholders’ interests and safeguard managerial employment contracts is recognised worldwide. For instance, the OECD Principles of Corporate Governance suggests that pany’s board should provide independent and objective judgements on corporate issues, apart from the management. The Combined Code and the Higgs report believe independent directors are essential for protecting minority shareholders and can make significant contribution to firm’s decisionmaking. They indeed remend that half of the board members, excluding the chairman, should be independent. 3 Conclusion By seeing the significance of independent directors, the Chinese authorities took the step, and a new chapter of corporate governance just began. In the past, few listed panies had independent directors as board members, pany decisions were either made by the management or the controlling shareholder without any monitoring mechanism from outsiders. Ultimately, poor performance was resulted due to firm’s inefficient corporate governance system, especially the low productivity and profitability of SOEs pared with that of township and village enterprises (TVEs), collectiveowned, foreign invested and private order to increase the effectiveness of the internal control mechanism, enhance the independence of boards of directors, the independent director system was introduced to Chinese listed firms. However, independent directors will not function effectively if some basic criteria are not met. This study shows there are five important factors that need to be considered in the independent directors’ performance model. Firstly and most importantly, is the “independence” of directors. In country like China, with the concentrated ownership structure and serious insider control problems, for independent directors to monitor firm’s major related transactions without minority shareholders’ interests being infringed, the basic element of “independence” must be fulfilled. Directors should be independent not only from the management, but also from the controlling shareholder. If independent directors have close relationship with any of them, they are not truly independent. Consequently, independent judgement or fair opinion is unlikely to be delivered, and interests of minority shareholders are less likely to be well protected. Therefore, “independence” is the prerequisite in order for the whole independent director system to take off. Secondly, from the perspective of motivation theory, money is often equated with the lowest level of needs, or important hygiene factor to prevent dissatisfaction. But others argue that money is important and it has a direct impact on satisfaction. The more ine an independent director receives from his job, the more efforts