Governance Structure Of China's Commercial Banks Impact On Business Performance

According to relative requirements on the open market of our financial industry in WTO, our financial industry would be totally opened gradually. Presently, our banking business is facing fierce international competition. Under this condition, the importance of modern banking system to our country and banking business which have just began reform should be further realized. In fact, one of the important cores of banking competition was the competition of modern commercial banking system. The governance mechanism of commercial bank corporation decided the marketability of them in a large proportion. With the reform of financial system, especially the deepening of the banking system reform, optimizing the bank governance structure has become the only route to enhance the competitiveness of the banks in China.The joint-stock commercial banks in China were growing with the development of market economy. They were the product of market economy. Therefore, the joint-stock commercial banks in China could meet the requirements of modern enterprise system, and they are established and developed in accordance with current national laws and regulations. However, due to the relatively late opening of our market, many well-developed systems in western world are still in the exploratory period in China, and commercial banks in the period of economic transition was in the intervention of government, many problems still existed in the state-owned banks in China, such as the low rate of capital sufficiency, the high rate of non-performing assets ratio, the poor performance of banks. To sum up, the reason of these problems was the relative low governance efficiency of some commercial banks in China. In recent years, some of our large state-owned commercial banks has turned to the improvement of corporate governance structure, and had made some progress. But because the joint-stock reform and listing of our commercial banks did not take long, further development of corporate governance structure was still needed. The strengthening of relative research about joint-stock commercial banks governance would not only let us have further comprehension about the features and present situations of corporate governance of our joint-stock commercial bank, but also give suggestions about improving and perfecting banking corporate governance mechanism to the reform of our commercial banks.At the present stage, the existing problems of our banking governance structure are mainly the lack of supervision mechanism, the unreasonable proportion and personnel structure of independent directors and the relative small ratio of its number, the unequal of payment design and performance of the managers, the general scale effect and risk preferences of banking industry. All these problems have lead to the high rate of non-performing assets, which seriously affect the competitiveness and business performance of the banking industry. Based on this background, with the combination of the peculiarity of commercial banks governance, the research framework of banking was set up under the general pattern of corporate governance. According to the annual report data of these joint-stock commercial banks, the governance structure of commercial banks and its relationship with their performance was discussed with the methods of theoretical analysis and empirical analysis.This research paper was divided into five parts. The first part is the introduction part. In this section, the significance of the research background was mainly described, which would lead to further discussion. The second part was about the general theory of governance structure and the bank performance. On the basis of the general theory of corporate governance, some characteristics of commercial bank management was analyzed from general to particular. Then, the concept and evaluation criteria of the bank performance were analyzed. This part provided the basis about the variables for the empirical research of this paper. The third part was the banking corporate governance and business performance analysis. In this section, the governance and current situation of our commercial banks in history was analyzed and concluded, which lay the foundation of the empirical research of our commercial banks. The fourth part was about building the model. The empirical analysis was used for the relationship between the corporate governance and performance of joint-stock commercial banks in China. Firstly, According to the annual report data of selected banks, the hypothesis was carried out according to the theoretical basis of the former review and the evaluation index system of commercial banks, and the regression analysis would be adopted with the usage of metrology software. Like the former part, the fifth part analyzed according to the result of software regression and the current situation of China. The last part drew a conclusion and gave suggestions about the present corporate governance of commercial banks of China.