Analysis Of China's City Commercial Bank Corporate Governance

The subprime lending crisis has triggered a global financial tsunami, the blind pursuit of profit-maximizing business philosophy by the U.S. investment banks and commercial banks has been widely criticized. Thanks to this crisis, the corporate governance of bank has got unprecedented attention and been widely discussed.Corporate governance is the most important organizational structure of a modern enterprise system. It is a group of institutional arrangements,which regulating responsibilities, rights and interests of all paties. It is a set of relationships including the company's senior management, board of directors, board of supervisors, shareholders and others involved. Through this framework, the company's goals and the means to achieve those goals to be determined.City commercial banks is a special group of China's financial system, since 1995, city commercial banks in some large and medium cities were founded, based on restructuring of city credit cooperatives in accordance with requirements of the shareholding system. There are currently 136 city commercial banks, which have become China's third echleon banks, but the overall level of corporate governance, operational strength fall far behind state-owned banks and joint-stock commercial banks. After years of reform and development, city commercial banks have showed great vitality. By actively preparing for the asset reorganization, introduction of foreign investment, cross-regional development, planning listing, city commercial banks continue to improve corporate governance, making their status significantly increased in China's banking and playing an increasingly important role in socialist economic construction of ChinaThe paper analyzes corporate governance of bank theoretically with work experience, real cases are also quoted in this paper with focus on the development of corporate governance. By using research results in corporate governance and comparing two main international models, the special nature of commercial banks in corporate governance is illustrated. The analysis of the development and present situation of city commercial banks reveals the main problems of corporate governance. Taking CQ banks as an example, the paper points out the important role of stripping non-performing assets, introduction of investment and the listing played in improving corporate governance.External factors like local governments, regulatory authorities, social supervision are also analyzed. Finally,some measures are put forward to optimizing corporate governance of city commercial banks like defining responsibilities of "three boards and the management" improving the collective leadership of party committees,establishing a system of joint conference and a scientific long-acting incentive mechanisms.