Former officials now independent directors

Xinhua found almost all public companies did not elaborate who nominated the candidates and why they were nominated.

After the resignation of the three former officials, Sinotruk said it "respects and accepts their decision," but declined to reveal why it employed the three.

Xinhua reporters contacted three other companies with former officials as independent directors, but all of them said the reasons for employment involve the companies' "major affairs" and are not suitable for further explanation.

"Connections with the government have been regarded by many companies as important corporate resources," said Gao Minghua, an economics professor at Beijing Normal University.

"We tend to choose those who are well-connected and can be helpful to the company," a secretary of a Shanghai-based listed company, surnamed Dong, told a reporter.

A public company manager, who refused to be named, said companies employ former officials as independent directors for their influence and "coordination abilities" in business circles.

Independent directors not effective

Despite years of political experience, these former officials, some in their 70s, may not have sufficient energy and economic expertise to perform their duties as independent directors.

Referring to the annual reports of a number of listed state-owned companies, reporters found some aging independent directors failed to always be present at board meetings.

An unnamed independent director said he indeed attended the company's board meetings and has some knowledge about the company, but as far as specific issues, such as the company's development strategy and financial planning, he "does not have much time to do thorough research."

It is believed that the independent director system at many of China's listed companies are just formalities.

According to a report from the Shanghai Stock Exchanges, only 38 independent directors of 26 companies raised objections to relevant company matters in 2011.

"The ideology of officials is to obey and implement, while what independent directors need to do is oppose," said Gan Peizhong, professor at Peking University's Law School.

Noted Chinese independent director Wang Pu believes the public should be more tolerant of officials who become non-executive directors if they are acting legitimately.

Some experts suggest transparency in the independent directors' work and more supervision from the media and the public.

Zhu Lijia, a professor with the Chinese Academy of Governance, said retired officials must not assume such posts in the same industries and places they worked before in order to avoid nepotism.