Study On The Feasibility Of City Commercial Banks Stakeholders Governance Model

In recent years, under the environment that domestic banking industry reforms and develops, based on their own realities, city commercial banks have expanded the scale while strengthening inner quality in accordance with market principles, adapting themselves to the development trend of international and domestic banking industry. The outstanding banks among them, have achieved cross-district business and capital market financing, becoming prominent at financial market. Up to the third quarter 2007, the total assets owned by city commercial banks all over the country reached 3.09 trillion RMB. The quality of these assets is better than those of the four biggest national commercial banks. The city commercial banks have become an important emerging force.However, the scale of any single city commercial bank is small, and he has no advantage in operating idea. Therefore, the choice for corporate governance is core problem in science development of city commercial banks.The theories about Corporate Governance have different branches, which mainly include traditional theories and theories about stakeholders in corporate governance. Traditional theories follow the Principle-"Shareholders are god", stress the point that Shareholders are only owner of corporate and corporate governance system serve the shareholders.The representative of the theoretical of Co-governance mechanism by stakeholders is M·Blare of the Brookings Institution. This theory holds the ownership is a complex concept. Owning only part of an enterprise, the shareholders are not the exclusively owners. The same as the shareholders, staffs, managers, suppliers, creditors and clients all invest in the enterprise intentionally bearing surplus risks. The target of the enterprise operation should not only limit in the maximization of the shareholders' interests, but take other parts' (staffs, managers, suppliers, creditors and clients) interests into consideration. With the development of the modern capital market, the shareholders are liable to "vote by foot" with less and less sense of responsibilities trending more and more dispersing and reactive. Other stakeholders investments might be specific assets whose value may be depreciated once being not used in their specific way. Therefore all the interest-related parts should be owners of the enterprise. The company administration is not limited in coordinating the relationship between shareholders and managers. In the board of directors, besides the representatives of the shareholders, there also should be the representatives of the stakeholders.The previous research about the Co-governance mechanism by stakeholders mainly based on the basic theory stressing on the managing mode in a general concept of the whole country's enterprises without specific trade focus. Combining the logical deduction and practical analysis, this article contributes to apply the theory of Co-governance mechanism by stakeholders to the research on the company administration of city commercial bank. Through the theoretical analysis and context analog research, the article comes to the conclusion that the theory of Co-governance mechanism by stakeholders in the bank is fit and feasible, which can help enhancing value of the bank.