Empirical Analysis On The Performance Of Corporate Governance Of Listed Banks In China

From the mid-1990s the corporate governance issues were widely discussed and drawing unprecedented attention. Especially after the 1998 Asian financial crisis and the US company Enron and WorldCom corporate scandals in 2001. Corporate governance issues have been highlighted as the core elements related to Global financial stability and economic development. Sub-prime mortgage crisis in the United States on the world economy triggered the contagion effect. So that we can see, when big fluctuations occurs in the macro economy, because of the scientific management and a good social responsibility the banks with good corporate were less impacted than the banks in the general level. By the end of 2007 14 banks have become public companies in Shanghai and Shenzhen stock exchanges. Recent years China's banking industry actively carry out the construction of corporate governance mechanism. It has been achieved some preliminary results in the upgrading corporate governance, but is also faced with new challenges. Refer to the domestic and international banking experience in corporate governance, this paper presents an empirical study of corporate governance of China's listed commercial banks and try to explore a further development of corporate governance of China's banking industry.Although there are many academic study of corporate governance recent years, but rarely for commercial banks on corporate governance performance and less for China listed commercial banks. Referring to existing academic study and considering the special nature of commercial banks, this paper makes a simple analysis in corporate governance of the current listed state-owned and joint-stock banks, including ownership structure, the board of directors, the incentive and restrictive mechanism and supervision mechanism and etc. And then to the empirical analysis, this paper chose five listed joint-stock banks and got 36 annual reports from 1999 to 2007. The results showed that the stake proportion of major shareholder and the concentration of shares did not have a clear positive impact on bank's performance. The scale of Board was negative correlation with bank's achievement. Board of directors, board of supervisors and controlling shareholders played a certain positive role on bank loans in the governance structure of listed banks.Considering the choice of corporate governance model, we think that in order to improve the corporate governance of China's listed banks, it is necessary to establish reasonable structure in the shareholding, standardize the board of directors, board of supervisors, as well as diversification, high transparency of the incentive mechanism, strengthen the risk management aspects to improve their internal management structure. Considering the related stakeholders the construction of the common governance model of listed Bank should form co-governance systems with the internal and external including the external market and monitoring institutions. Currently the financial reform and economic development continue to be deepened. This paper can provide some suggestion for China's listed banks to improve their corporate governance reform and has a reference of great theoretical and practical significance.