Empirical Analysis Of China's Commercial Banks Board Governance

Because of the financial crisis of South America and Southeast Asia, bankrupts, Merger and reorganization of banks all over the world since 1990s, bank governance has attracted more and more attention. Which once was the supervisor gradually becomes the one to be supervised. It is the underlying means to prove the governance mechanism of financial institution to avoid crisis with the background of banking reform in China.This paper analyses how to improve banks' efficiency with the improvement of board of director governance. Board of directors' governance is the core of corporate governance. Board of directors is the one has the powered right and supervision rights with the authority of shareholders. Board of directors is the maker of the strategy of the firm and the managers and supervisor of management.The condition of governance of board of directors, such as size, independence and what it does have important affects on the agency problem. Perfect structure and right means to work can control the managers who purchase his own profit instead of the maximum profit if the firm to low the agency cost and improve efficiency. The special characters consider board governance so important for banks. Perfect mechanism and good way to manage is important.This paper combines the theories of corporate governance and bank governance, and it consists of 4 chapters. After the introduction, there are the basic theories of corporate governance and bank governance. In the 2nd chapter, the peculiarities of bank governance are discussed. Then it comes to the directors' mechanism and the peculiarities of banks' board governance. In chapter 4 and 5, we analyze every factor of board of directors that can effect efficiency, and then attempt to find the relations among efficiency and the factors. Our data consist of 173banks comes from one research and the rest are from banks' annual reports. We find that the board of directors' mechanism is important. Independence may hence the ability to supervise. The higher percent of independent members of the board and the lower control the managers have on the board also does better to the governance and efficiency.