Research On Corporate Governance For China's Commercial Banks

At present, the global financial crisis is still spreading, the risk of the world economic recession and the domestic economy downlink increased. Over the years, the China's commercial banks have improved corporate governance, strengthened risk management, as well as innovation and development and sustainable profitability, all of them are experiencing the most brutal test since the beginning of the new century. Taking an overview of China's banking sector reform, corporate governance reform is still the"main theme"and"keywords". This stage, compared with the international leading level, China's commercial banks to bridge the gap between corporate governance there is still much work to be done. Standing at a new historical starting point, we should take an in-depth study of factors and constraints which commercial banks corporate governance model. For example, what kind of commercial banks more in line with the concept of governance in our national conditions and market? How to be able to establish effective competition on the advanced international banking management structure of the commercial banks in a relatively short time? How to sum up the lessons on the financial crisis and to strength training and other issues of governance? It is a very important theoretical and policy implication on these researches.First of all, the paper made a comparison and definition on the corporate governance, corporate governance mechanisms and corporate governance structure of the content, as well as maximizes shareholder value theory, to protect the interests of investors and stakeholders. Combining with the particularity of bank corporate governance, the paper built a general theoretical analysis framework, emphasized the development that "multilateral co-governance" model. In this paper, we pointed out the particularity of the banking makes the events of economic entities more complex. Ownership structure, incentive mechanisms, and organizational structure of banks together constituted the internal governance mechanisms of corporate governance. In the external governance mechanism, government regulation, credit system, law environment, regulation and control means, capital market constituted the main part of public governance. However, mergers and acquisitions, managers, product marketing, such as the impact of market governance mechanisms is still limited.Secondly, this paper argued that China's banking reform has made a long time lag, and its reform generally follows the idea that reform the market structure in the beginning. After the market structure to promote the deepening of the reform process, the reform of property rights also sync follow-up. At China's banking reform and institutional change process, the country is not only playing a "first action group" role, but also affects the costs and benefits expected of the lower structure. Essentially, changes in trajectory of China's banking sector are well in line with the overall logic of ideas and theories.Third, the paper selected for 2002-2007 at the Shanghai and Shenzhen A-share market listing of 14 commercial banks′panel data, empirically test the relationship of the commercial bank board of directors governance and the business performance Due to the particularity of the commercial banks, the firm governance of its board is not simply the matter of using governance theory. As results showed that, the board has played a certain role in fulfilling the development strategy and supervisory functions of China's listed banks in recent years. The practice effect of independent director's serving life has different from the annual meeting, a relationship between the number of the board of directors, the proportion of independent directors and the bank operating performance is less clear. This reflects the same factors on bank accounting value and market value of the impact is different.Fourth, the paper pointed out that although China's commercial banks have been gradually abandoning the planned economy era centralized distribution system, but still with a strong incentive-led administration colors. Recently, the executive compensation of listed banks triggered a public debate and government's concern. This paper used the research samples of 2004-2007 in Shanghai and Shenzhen A-share listed the 14 banks and other listed companies in 3142, to measure the relationship between listed companies executive pay and performance. As results showed that, the current compensation level of bank executives has a more closely linked with bank-scale, comparing to its assets efficiency. The compensation incentive of listed banks pays a significant role in promoting performance. This shows listed banks still pay more money in cash income, long-term incentive approach has not play its due effect. Finally, the paper analysis the distinction between public governance and market governance on the role of principles and constraints, through studying the banking Supervision, legal environment, information disclosure, product markets, the control over market, the manager market and other factors. On this basis, the paper proposed specific ideas and policy recommendations for commercial banks continue to deepen the reform of corporate governance, to improve banking supervision work and to create a good external governance environment.