State-owned Commercial Bank Corporate Governance Structure

In the recent years, more and more people are concerned with the issue of corporate governance. The theorists have deeply probed into corporate governance and formed some consensus. At the same time, a lot of celebrated companies and institutional investors have taken some explorations in the practice and given some typically standard examples. The commercial bank is a kind of special company, which is confronted with great risk and involved with many interest-related people. The great crises of the banking will influence every aspect of a country, whereas it is so fragile. The establishment of effective corporate governance in a bank will be beneficial to the safety and development of commercial banks. Though our state-owned commercial banks have been reformed for many yeas, it hasn't been set up the effective corporate governance yet. The defects in corporate governance make the productiveness and competitive ability of the state-owned commercial banks comparatively weak. Based on the principal-agent theory, referring to a model of the state-owned commercial banks, we analyze how the relationship between government and the manager affects the economic benefit of the state-owned commercial banks. In the light of above analyses, we put forward some suggestions to improve corporate governance. First of all, we need carry on the reform of share-holding company urgently, the process of which can be divided to 3 steps. The goal of reform should be to list on the open markets. Then, reform the incentive and binding mechanism to resolve the agency problem. At last, we should improve our external surroundings to accord with the internal reforming of the state-owned commercial banks.