| Trust,with a long history,is originated from the behavior of establishing a testament in ancient Egypt and the concept of “trust-bequests” in Roman Law.Modern trust system can be traced back to “USE” in the UK,was booming in the USA and witnessed further innovations in Japan.At present,in the financial system of western countries,trust has seen a wide application for it is not only an investment behavior to make profits,but also can be a wealth management tool to avoid tax and dispose spare assets.In China,trust industry was “reborn” in the year of 1979,but with twist and turns in the strange circle of “development-irregularity-readjustment”.Till the early 21 th century when the “one law and two regulations” was approved,the trust business began coming onto the right track,with rapid development.By the end of 2015,the overall AUM of the trust industry has reached 16.30 trillion Yuan,17.42 times up in less than 8 years.However,irregularities have occurred very often due to imperfect internal governance mechanism.What's more,under the upcoming “PAN Asset Management” era,and in fierce competition,the growth rate of asset scale decreased from 58.25% of 2011 to 16.60% of 2015,and the fees rate fell from 0.92 in 2011 to 0.19% in the second quarter of 2015.A sound corporate governance mechanism can contribute to the company's overall performance and general competence.A trust company is different since the trustee can be not only the shareholder but also the asset trustee,which will certainly affect the company's benefit mechanism and other factors.In the western countries,most of the trust companies should be sidelines of the banks so there is nearly no independent trust company.In China,most of the trust companies have not been listed,hence the available documents for research use are relatively few.In a word,the topic of whether the internal management mechanism can affect the whole trust company is significant.This dissertation,written on the basis of existed documents,combined with the trust companies' unique characteristics,and illustrated corporate internal management mechanism from the aspects of equity structure,BoD system and compensation incentives of the management team.Specifically,this dissertation firstly selected 9 indexes which can represent China's dual settlors'(trust settlor and shareholder settlor)interests to analyze trust companies' profitability,asset quality,and growth ability in order to figure out the overall KPI;secondly analyze the operation mechanism and build hypothesis;then verified the models according to the 2010-2014 statistics;at last,this dissertation compared the results with other trust companies and then analyzed in detail.The general conclusions are as the following:1.In China,the general background can play a significant role on a trust company's overall performance.Trust companies under SOE or financial group can have the advantages of sound cooperation and large business scale.However,the equity structure is highly centralized so that other shareholders could not balance the first majority shareholder,which will weaken the company's overall performance;while the quadratic curve results in the slight upside down “U” relationship between the highly centralized equity structure and performance.Strengthening the balance of equity structure can prevent the first majority shareholder to seek for the self-interest,weaken the invasion over other minority shareholders so that finally improve the company's overall performance.2.In China,the relationship of BoD and the company's performance shows an upside down “U”,while its independence and performance shows negative correlation.It is indicated that improper scale of BoD will not benefit the company;the independent director always cannot play a much bigger role,as a result,the decision-making procedure will be slowed.The separation of the two posts can help the BoD make decision by itself,strengthen the management and restriction over the management team by the BoD,avoid the opportunity to realize self-interest and lessen agent cost;the more times the BoD will hold,the well each director's communication will be,in order to supervise the management team and to at last increase performance.3.Salary incentive mechanism can help senior management team build interests in exploiting businesses,restricting behaviors,decreasing agent cost and increasing performance.Also,there are two innovations over this dissertation:1.Compared with the existed research results,this dissertation has expanded the field of trust company's internal management mechanism,and has enriched the study over the relationship of mechanism and performance.Since the trust companies have their own characteristics,the agent mechanism,profit model,multiple supervisions are all different from banks,securities and insurance companies,and most of the trust companies are not listed,the research references are relatively few.To some extent,this dissertation has just contributed a lot.2.Compared with the existed research results,aiming at China's trust businesses' special characteristics-dual settlor system,this dissertation has selected financial indicators reflecting trust and shareholder settlor respectively to design the comprehensive KPI indexes.Considering about the characteristics of the businesses and the agent mechanism,after referring both domestic and aboard documents and combining with SOE performance evaluation interim measures,this dissertation has selected 9 indexes-ROA,profit rata of net worth,per capita profit(representing shareholder settlor's interest);the growth rate of the trust assets,the growth rate of assets,trust assets yield,net profit growth rate,trust income growth rate,net profit growth rate of trust assets(representing trust settlor's interest)-by analyzing profitability,asset quality and operation growth ability.Those 9 indexes has well illustrated the interests of the contributor and the trustee,in an effort to comprehensively explain the real and potential value of trust companies. |
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