The Research On The Corporate Governance Of State-owned Commercial Banks

In the past 20 years, great changes have taken place in China's financial industry as a result of system reform and theoretical creation. China's state-owned banks have made great achievements in the process of reform. But corporate governance is a major hindrance for the development of commercial banks which leads to low efficiency of business operation. Therefore, corporate governance has become one of the hot topics in the financial field. The present thesis is a tentative systematic study of the problems in the corporate governance of China's commercial banks.The first part of the thesis is a brief introduction to the theoretical basis of corporate governance which originated from the contract theory and aims to solve the principal-agent problems resulting from the separation of ownership and operation. But in the construction of the corporate governance, the functions of the respective interest-related parties theory has enhanced the further development of the corporate governance theory.The second part explores the corporate governance theory of commercial banks, which was put forward as a result of the consideration that commercial banks are different from other productive enterprises. Commercial banks are special high-risk enterprises that deal in money. They have to maximize the benefit and minimize the financial risk in money operation. So, commercial banks have more complicated interest-related parties, and their corporate governance involves a whole set of systems concerning banks managers, board of directors, shareholders and other interest-related parties, influences the corporate objectives, daily operation and the interest of related parties, and complies with rules and regulations.The third part analyzes the corporate governance practice of China's state-owned commercial banks which occupy the main position in China's financial field and their steady operation has a bearing on the development of China's economy and finance. But the corporate governance practice shows such defects as emptiness of ownership, lack of efficiency in operation. In order to protect the interest of state-owned commercial banks and improve their competitive force, the author thinks that China'sstate-owned banks must set up their perfect corporate governance which can ensure the interest-related parties, clear definition of their rights and duties, harmonious and mutual-control relationships.The fourth part examines the modern corporate governance types and experiences of foreign commercial banks. There are three type of modern corporate governance, namely, market-oriented type, relationship-oriented type and state-owned type. All the three types have their own advantages and disadvantages, and have played their respective important roles in their respective circumstances. But with the acceleration of economic globalization, the different types are showing similarities, and the core spirit is the same, that is, a good corporate governance can reduce the principal-agent cost, balance the benefit of interest-related parties, and raise the operational efficiency. This is worth imitating by China's state-owned commercial banks.The fifth part is the author's proposal for construction of the framework of corporate governance of China's commercial banks, which, in order to protect the benefit of all the related parties, takes into consideration both the internal and external aspects. The internal aspect includes the set-up of risk-control mechanism, sound board-of-directors mechanism, performance-based encouragement mechanism, and a human-centered enterprise culture. The external aspect includes the strengthening of supervision and related legal system, fair and effective competition environment, and lightening of government behavior.