A Study On Corporate Governance Of State-owned Commercial Banks

After more than twenty years' reform, the ratio of state-owned property right is decreasing in most of China's sectors. But, as one of the most important parts of the national economy, state-owned commercial banks (SCB) still keep unchanged resulting in low efficiency and competing ability. Meanwhile, the corporate governance of SCB less improved considering a series of complexes like organizational structure and personnel management and it has become bottleneck of deepening the reform of SCB. Related defects of SCB are illustrated in the article to make sure that it is a key to the success of SCB's reform to construct effective corporate governance. Furthermore, it has been emphasized that the core of reform lies in the change of ongoing property rights structure, which is much in accordance with the "Three Steps" strategy made by the central government for the reform of SCB. Firstly, in line with the requirements of the "law of firms", building SCB as genuine state-solely-funded companies and taking limited responsibilities in terms of state-owned capitals. Secondly, making stock-sharing system reform on specific banks. Thirdly, when it is matured, choosing proper banks listed. From the "Three Steps" strategy, it could be concluded that the reform is conducted centering around property right reform and from the angle of making perfect of the corporate governance of SCB. The construction of corporate governance suggested in this article follows this procedure.The article totally consists of four parts. The first one introduces related content of corporate governance of commercial banks. Firstly, with reference to viewpoints of many experts, corporate governance is defined, that is, it is a set of system arrangements to deal with relationship of different internal stake-takers. Furthermore, it is analyzed for the core of the corporate governance, property right structure. Then, the corporate governance of commercial banks, as special companies, is explained based on general corporate governance introduction. Finally, it is briefly introduced for current research and practice of corporate governance of commercial banks.The second part makes comparative analysis on several corporate governance modes. Firstly, the property right structure is divided into three kinds: highly scattered structure, concentrated structure and highly concentrated structure. Then, correspondent to this three property right system, the corporate governance of modern commercial banks is also divided into three kinds: marketed one by external supervision, connected one by internal supervision and managed one by government supervision,characteristics of which are analyzed respectively.The third part analyzes the presence, shortcomings and results of the corporate governance of SCB. Firstly put is the presence followed by comments on so many defects. Afterwards, comparison is made between SCB and top foreign banks, which indicates that reform is necessary to deal with fierce competition after China's entry into the WTO.The fourth part puts forward suggestions to construct effective corporategovernance of SCB. Considering the fact that it is a special transiting period for China to shift from planned economy to market one, the reform will definitely affect the national financial system, financial market and the socialism market economy as a whole. So, steps should be taken gradually to promote the reform. Firstly, making perfect the corporate governance on the basis of state-owned property right. Secondly, building new corporate governance with the development of reform on stock sharing system. Thirdly, constructing modern corporate governance through the listing of SCB. Finally, it is noted that the reform of property right could not conducted separately. Instead, traditional viewpoints should be altered and related reform on other fields should be followed.