Chen Zhuming, a finance professor with Sun Yat-Sen University, resigned from a listed company in Guangzhou, Guangdong Province on Monday. Chen is not the only academic making this decision; over 300 university personnel have resigned from their private sector posts after central government and Party organs upped their efforts against corruption in China's education system at the end of last year.
The Ministry of Education (MOE) started a special inspection of Party members and officials taking part-time jobs outside their office in the fourth quarter of 2015, the Xinhua News Agency reported in November.
Many universities are boosting inspections of their personnel after the ministry dismissed Liu Ya, vice president of the University of International Business and Economics, from his post for not reporting his other jobs.
Liu was paid over 1 million yuan ($153,000) while working as independent director for six companies from 2009 to 2014. Yearly salaries for China's best-paid professors can reach over 330,000 yuan but the earnings of the worst-paid can be as low as 30,000 yuan, Beijing-based newspaper the Legal Mirror reported in 2014.
Tang Kewen, a professor with the Hunan Institute of Science and Technology resigned from Yueyang Xingchang Petro-Chemical's board of directors due to his "heavy teaching and study workload." Jiang Guohua, a professor at the Guanghua School of Management at Peking University also resigned from Yueyang's board as he "needs to put more energy into university work," Xinhua reported.
Thousands of university personnel, including headmasters, have been hired by listed companies as directors since 2001, when it became mandatory for one third of such companies' boards to be made up of "independent" directors, China National Radio (CNR) reported on Monday.
About one third of the 9,000 independent directors hired by China's A-share companies are active or retired university professors as of December 2015, said the CNR report.
No cheating
Though universities do not ban their personnel from working for companies as independent directors, some teachers have chosen to resign as directors in case their promotion prospects are affected by the anti-graft drive, an academic in Beijing who previously was a member of a company's board told Xinhua.
The MOE banned Party members and senior officials at universities affiliated to the ministry from working for companies or as paid agents "against the rules" in 2010, Xinhua reported. However, which "rules" the ban refers to were not specified. Universities affiliated to other departments are not covered by these regulations.
As part of the anti-corruption campaign, the Organization Department of Communist Party of China (CPC) Central Committee issued a circular in 2013 that banned Party members and senior officials from assuming posts outside their office, Xinhua reported. However, which "rules" the ban refers to were not specified them either.
Some 40,700 independent director positions - that were filled with both university and government officials - with listed companies were vacated following these bans, Xinhua quoted the committee as saying in 2014.
Song Chang, a professor with the Renmin University of China who once served as the independent director for four listed companies at the same time, was probed for insider trading by the China Securities Regulatory Commission, the country's top financial watchdog, in January, news portal thepaper.cn reported.
Dubbed the "busiest independent director," Song had also served on the boards of another eight listed companies, said the thepaper.cn.
Song reportedly received a total of 400,000 yuan in 2014 from the four companies for which he had been working.
Link to power
While large numbers of university personnel are resigning, hundreds of university teachers are still sitting on boards, and the companies are not hiring them only for their academic qualifications.
Senior university officials can help company leaders' children get into their schools, and some professors are also hired by industry associations and government departments as consultants, making them a valuable link to official power, said Xinhua.
Academics may provide the company with more loan opportunities and personal connections, Yin Zhichao, a finance professor at the Southwestern University of Finance and Economics, previously told the Global Times.
But few academics actually know the companies well enough to help them make decisions, added Yin.
The payment of independent directors varies from 1,500 yuan to 970,000 yuan per year, the Yangcheng Evening News reported in January. "The rising demand for independent directors, who are expected to be former officials or renowned scholars, has led to the high salaries," Yin explained.
