Corporate Governance Risk Of Commercial Bank In Our Country And Performance Study

The outbreak of the global financial crisis,its reason lies in the governance risk of financial institutions. Our country is in the process of economic transformation, the phenomenon of"governance failure"is common and governance risk is widespread. Commercial banks are the body of financial institutions and play a vital role to economic development of one country. As a result, the study of governance risk of commercial banks and performance can keep watch and avoid risk and improve management efficiency, in addition, it has important meaning to keep the economic development stable and healthy.In this paper, firstly, we introduce relevant theories and research status .Then this paper selects data in year 2006-2009 of 8 commercial banks in China, using entropy method to measure its governance risks. Secondly, this paper analysis various governance factors toward governance risks, give hypothesis, using multiple regression to do empirical test. Once again, we calculate performance of commercial bank and do empirical test with governance risk. The purpose to do that is exploring the relationship between performance and governance risks. Finally, we give suggestions to perfect corporate governance and reduce governance risks of commercial banks in China.From the research we found that: whether the bank is state-owned has significant negative correlation with governance risk. It indicates that the country as a final control body can reduce commercial bank's governance risk. And the largest shareholder is positively correlated with governance risk. However, the ratio of top 10 shareholders,the ratio of annual shareholders' meeting attendance,whether the chairman is also the manager,the size of board,their share ratio,the highest amount of remuneration top three directors all have negative relation with governance risk. About performance and governance risks of empirical research, no relationship by significant test. But performance factors of corporate governance can make other corporate governance factors to reduce governance risk in greater degree.Our research enriched the study content of governance risks. And has some directive significance to reduce governance risks of commercial bank in China.