Corporate Governance And Performance Of Commercial Bank

Since the 1980s, pursued corporate governance-oriented investment strategy gradually become mainstream institutional investors .To banks, financial data only on behalf of the bank's current and historical operating performance, sound and healthy governance structure of the bank on behalf of the future behavior and values. General framework of corporate governance is by law, regulation, self-discipline mechanism, the initiative promises and business practices, and other factors posed by these elements because of environment, history and traditions of different makes a difference, the banks corporate governance framework is no exception. China's banking sector, corporate governance on the one hand because banks generally different from the special nature of corporate governance, and not in theoretical circles are fully revealed, the banks corporate governance systematic framework yet to be established; on the other hand because at this stage domestic commercial banks corporate governance environment of the more significant changes, in particular the existence of banking sector reforms often lead to a breakthrough in theoretical research, to date, the domestic commercial banks on corporate governance is the focus of constant change. The most controversial part of China's commercial banks is still the mode of corporate governance and management of the goal is the question of how to choose.In order to analyze the banking system of corporate governance, the paper on corporate governance and the development of the theory of banking companies to the theory of corporate governance and comments reviewed and sorted out, the bank will focus on corporate governance in the literature on the primacy of shareholders and the interests of corporate governance model related to corporate governance model two different models of governance. Through literature review, we see that the establishment of a corporate governance in a highly specialized division of labor on the basis of the modern corporate system running the core, as a special category of companies, banks in many areas have shown that the era of industrialization and more emphasis on material assets of different companies, economists have come to realize with those who are not regulated, non-financial enterprises compared to the banks of the corporate governance structure optimal design more complex and more important. At present governance structure of the banking company's main theories are an important differences, and the supremacy of unilateral management shareholders and stakeholders on the multilateral governance, and many researchers have emphasized bank companies should take stakeholders to jointly deal with the corporate governance model, but the attendant is the definition of stakeholders and stakeholder participation in governance issues involved in the mechanism remains unclear.Theoretically shareholder supremacy and stakeholders in two modes, in the practice of international commercial banks can be found in the corresponding control. At present, international commercial banks on the corporate governance structure, there are two: the United States and Britain under the law of the monolayer structure and the civil law system under the two-tier system structure, the history of the theoretical circle on the merits of the two modes of governance has never been controversy never stopped. Through two models of governance in the administration compared the effectiveness of the mechanisms can be seen, the choice of bank governance model is a gradual historical process, the reality of two governance model with environmental management change, there is also a mutual integration, learning process.Although many researchers have highlighted the stakeholders governance principles only blindly simply deny that the interests of shareholders and the shareholders of supremacy, does not deny shareholders to take into account other legitimate rights and interests of stakeholders on the basis of maximizing the pursuit of their own interests, it is embodied in the pursuit of their own interests and the parties formed a cooperative balanced. In practice, however, this governance model, but the operation encountered obstacles, we can seldom found with stakeholders mode of governance arrangements, leading to the causes of this phenomenon are many, and specifically to the banks to companies, the paper think that the problem as well as the organization of information to the low efficiency of the banking companies stakeholders to jointly deal with the most difficult mode insurmountable obstacles.In this paper, using a small savings banks and between the two-stage model of Dynamic Game inspection bank management and banking companies small savers interaction between strategy circumstances, the common mode of governance of commercial banks operating company efficiency and performance impact. As a research and paving the way, the paper's first bank stakeholders were defined, a small savings bank, as participation in the common management of stakeholders, namely banking companies stakeholders governance model that is the unspoken words of small savers on the banks involved in the process of corporate governance. In the case of complete information, the two-stage treatment Game balanced (deposits of depositors and maintain the interest income; managers choose low-risk projects and the efforts of a low level), but in this paper under the assumption that this Game is the only way to maintain the Nash equilibrium solution. The results of the analysis showed that, if the banks were small savings in the bank corporate governance arrangements in greater access to the power, then it will lead to commercial banks and the company's management performance of the banking company's competitiveness decline. This article holds that the corporate governance performance of the banks dropped from two aspects, first of all, savings banks and the company's management strategy for interaction between itself will enable optimal efficiency goals difficult to achieve, which originated in the bank's savings deposit and the bank's management of and the conflict between the objectives of the strategy in the process of interaction hard to establish trust; Secondly, the savings to the characteristics of risk aversion, as well as modern commercial banks to participate in the risk management process increase the cost of raising a small savings bank management and the exchange of information between difficult, leading to a further deterioration of the performance of management.In considering the depositors and the banking company managers asymmetry of information between the circumstances, we think it appropriate to the information asymmetry bank's performance has improved, that is difficult to bank depositors company for more information seems to be led to the bank better governance results, which companies to jointly deal with the banking model has been emphasized in view of the obvious differences. This caused some unexpected results is a major reason for the interest return to the banks and the difference between the return on investment, but also said that the depositors and risks borne by the returns achieved by the asymmetry between, and this it also is banking companies and the general distinguish between the important aspect. If only so that the depositors were difficult to access the corresponding information will allow banking companies to achieve better control effect, then the banking company should also take the mode of governance tend to shareholders, and corporate governance in the banking deposit protection of the interests of people issue should be specialized agencies to carry out commitments, such as deposit insurance, such an arrangement seems to take into account the interests of stakeholders balance the interests of all parties. In such circumstances, we can consider that the common mode of governance in the interests of depositors, the banks will ultimately reflect the company's risk management level, and different agencies, such as banking supervision department, FDIC, etc. can be risk common access to the management of the corresponding income, but can also bound banking firm managers over risky behavior.In order to describe the theoretical model validation of the results, the paper through empirical analysis and case analysis of the corresponding study. By using factor analysis to determine the various factors affecting the corporate governance system in the evaluation of the proportion of this is to explore what could be from commercial banks to evaluate the level of corporate governance, and based on this, using principal component regression Analysis of corporate governance on the performance of commercial banks. On corporate governance factors and the impact of corporate governance and the relationship between corporate performance Empirical analysis shows that commercial banks corporate governance, including internal governance and external governance in these two areas, but internal control is more effective than external management, and external governance in the regulatory agencies on behalf of small savers to participate in corporate governance actually helps the company optimize the management of commercial banks and enhance profitability.In addition, according to this system of economics, history along the threads of the two main international governance model in comparison, demonstrating its corporate governance mechanism to play its role of the different characteristics of the two modes is that governance effective model, there is no division into superior and inferior, but because these two governance model there are inherent limitations, as the international economic integration and accelerating the process of financial integration, began between the two modes of mutual absorption each other's advantages, to further enhance the effectiveness of governance. This paper reviews the reform of China's commercial banks course, the proof of China's commercial banks has been on the reform of corporate governance issues at the core of the reform, such reform is the history of inertia - Path dependence, and does not belong to any one model, which Characteristics of the most direct kind of performance to our corporate governance sources of the compound. The results of the analysis to strengthen internal control mechanism that the building would be the performance of China's commercial banks have greater role in promoting, and the reality of China's commercial banks of the major corporate governance reform, the system of corporate governance is essentially the various internal control system, internal control system that it is precisely the role of shareholders first governance model in the main practice. This situation once again proved China's Commercial Bank of corporate governance reform stage.The main conclusions can be summarized as follows: (1) Bank of stakeholders and stakeholder participation in the Bank's Corporate Governance specific mechanism is still not clearly defined; (2) theoretical model shows that stakeholders in the banking company Game management is not optimal balance (3) internal control mechanism to explain the larger commercial banks in China connotation of corporate governance, internal control mechanisms to explain the performance of the banks stronger and (4) Corporate Governance of Commercial Banks reform of the current banking reform and corporate governance should pay attention to how the internal governance mechanism.