The Bank's Legal Status, Corporate Governance Structure

Corporation management structure presents a global wide subject. The relations between the bank and enterprises become an everlasting hot topic for economy. As nowadays the entry of China's membership in WTO, it's of significance to probe with the legal position of bank under the corporation management structure both in theory and practice. From this point of view, the theme gives a deep analysis of the legal position of bank under the corporation management structure in five parts.The basic theory is given on corporation management structure in the first part. As what is the corporation management structure, different opinions have been put forwarded by Chinese scholars from different angles. Some look it as the presentation of ownership setting, or sort of organizing structure from mutual restriction. Other thinks it of common management mechanism under the shareholder and the beneficiary concerned. Author would stand on the latter theory that shows clearer the connotation.The beneficiary of corporation management structure comprises shareholders managers, workers and debtors, etc. Corporation management relates to not only the interests of shareholders, but also the other beneficiary concerned. The running of corporation relies on theinvestment from shareholder as well as the beneficiary concerned. Their joint investment forms the operating corporation.The theory of the beneficiary concerned with corporation governance structure impacts greatly on the traditional theory for corporation law. It stresses the independent character of the legal persons representing corporation and breaks down the narrow view of traditional corporation law on corporation and its financial ownership.The second part reveals the theory and practice by bank's participation in corporation governance. In the structure of corporation governance combined with the beneficiary concerned. The bank poses uniquely. The economic theoretical basis for bank participating corporation governance is that bank as the biggest financial supporter to the corporation (enterprises) takes most risks for credit so as most concern about the business activities operated by corporation. The most advance technical equipment, information net and the biggest loaner to enterprise enable bank to get involved in corporation governance structure. The human power, capital and information thoroughly served by bank benefit the development of corporation.The legal theoretic basis for bank's participation in corporation governance structure is that bank is the biggest leaner and long-term fund provider to the corporation. In fact, the loan is very much likely sort ofinvestment by shareholder. The financial ownership of corporation includes two parts of positive and negative. The negative means the loan from bank. The structure of corporation's financial ownership destines the participation in the management by leaner in order to protect its interest.Bank participation in corporation governance demonstrated differently in U.S. Germany and Japan. In the United States, bank occasionally get involved in corporation governance. Only when a financial crisis occurs in the debtor's corporation, the contract is no longer completed. The leaner shall take over the corporation in legal process. Bank in Germany is typical full function. Bank is able to run all financial business activities. Japanese bank takes the leadership in system. There is a long term, stable and comprehensive dealing relation among enterprises and banks. The bank that forms the relationship will be the principle bank. To compare with these three modes, in term of participation in corporation governance structure, American bank is basically negative attitude, while German and Japanese are more positive in action.The third part gives the fact showed by bank participation in corporation governance structure and the history, current situation and typical point of relationship between bank and enterprise in China. Chinese banks get involved in corporation governance structure undercontract systems.