Study On The Relationship Between Corporate Governance Structure And Performance In Chinese Listed Banks

The reform in China’ banking sector is an important part of China’s economic reform,the reform of commercial bank will give an overall impact on national economic andfinancial development in the future, and play a decisive role in China’s economy andfinance. In addition, in recent years with the international financial upheavals anddifferentiation among the world’s financial institutions, national financial institutions allthe world carried out re-integration, new patterns appears in the international financialcompetition. All these factors at home and abroad of China’s financial pose a severechallenge. After the full opening of China’s financial markets, increased competitionbetween domestic and foreign banks. In essence, this competition is competition ofmodern banking system. the core of the modern banking system is modern bankingcorporate governance mechanism. Therefore, the governance structure’s optimization isthe only way improving our country commercial bank competition.The Commercial banks take a kind of special company, both universality havinggeneral company and have whose particularity. In current to corporate governancestructure question research results, what the domestic and foreign academic circle morepay attention is the enterprise, specially to be listed corporate governance structure, butthe discussion of governance of commercial banks is relatively few. Based on this, thisarticle, in governs to the bank company carries on the theoretical analysis in thefoundation, this paper analyzes the corporate governance of the listed banks in China.With full consideration to the banking’s peculiarity, the establishment of a group ofmodels consisting of a single equation and simultaneous equations, this papar empiricallyanalyses the relationship between ownership structure and bank performance. Theevidence suggests that larger proportion of the largest stock-hold, balances capacity of thelargest stock-hold and higher ownership concentration hinder the bank to improveperformance.But foreign strategic investors and the nature of the actual controller areaccelerant of bank performance. In addition, the study also found that the board sizes havenegative impact on performance.But the proportion of independent directors and bankelderships have certainly helpful for performance.The introduction of strategic investors, especially foreign strategic investors, have been more and more popular among the Chinese listing banks, for the purpose ofcorporate governance&bank performance improvement. This paper, based on a samplelisted Chinese banks, using the panel data empirical model, analyses the influence offoreign strategic investors introduction to the listed Chinese banks, from4perspectives ofbank governance index, bank security, bank profitability, and bank growth. The findingsare that after the introduction of foreign strategic investors, the basic characteristics ofbanks show significant difference, with the bank governance index, bank security, andbank profitability mostly in line with theoretical expectations, except for thecharacteristics of bank growth, which can be explained as the result of a gradual reformprocess for the listed Chinese banks’ introduction of the foreign strategic investors. It isimplied that the introduction of foreign strategic investors could improve Chinese listedbanks’ governance mechanism with recent opening of our financial sector. Thisimprovement demonstrates that those banks partnered with foreign strategic investorshave in fact replicated the maturity structure of foreign corporate governance, advancedmanagement concepts and their risk control technology, achieving the initial target of theforeign strategic investors introduction. It is noted that this research is focusing solely onstrategic investors, not strategic speculators, and the authors have conducted strictselection on sampling the foreign strategic investors, to get rid of disturbance from thosesmall-scale foreign speculators, who are different from strategic investors, always givingno thoughts to long term value of the investors, and therefore would bring no benefits onimproving the management system and technology of the Chinese listing banks.In this paper, through collecting data about listed state-owned large-scale joint-stockcommercial banks and other listed bank in China, and taking the empirical analysismethod to analyze the relationship between the bank information disclosure and corporategovernance performance.The evidence suggests that China’s listed banks only theleadership structure and ownership structure has significant relation with the disclosure.In the strong competition product market on corporate governance control mechanismformed after the binding statistics show that the internal governance structure of imperfectChinese companies, the strong product market competition will further reduce internalcontrol mechanisms on the disclosure of accounting information quality improvement.The paper use the data of listed joint-stock commercial banks, empirical analysis therelationship between Board Independence and bank performance. The results showed that the performance of the Board to promote the independence of the role of banks is notobvious. In addition to improving bank performance improvement management structure,the increase in the number of outlets, increase market share also has an important role.Finally, the paper proposes some policy suggestions about bring in strategic investors andimproving the internal control mechanism and so on.