Study On Impact Of Corporate Governance Upon Performance Of Rural Cooperative Banks

At present, the joint-stock commercial banks evacuated from the rural market in order to seek higher profits, and the rural credit cooperatives (the rural cooperative banks or the rural commercial banks) have become the main forces of providing rural financial services, which play an important role of solving "Three Rural Issues" and can push the rural economy to a market-oriented one. But it is universal in rural credit cooperatives that there exist problems such as weak awareness of risk, chaotic financial management, unscientific loan classification, heavy burden of history and so on, leading to its weak ability of self-development. The further development of rural credit cooperatives fundamentally relies on further reformation. In2003, the State Council issued the pilot program of deepening the reformation of rural credit cooperatives, and then rural credit cooperatives have started a new round of reform. Improving corporate governance mechanism has been widely recognized as an important part of reform and an effective way to enhance the competitiveness of credit cooperatives. Corporate governance has become an important factor to affect performance of banks, and plays a pivotal role in the sustainable development of rural cooperative banks. In this context, taking Shandong rural credit cooperative as an example, this paper studies the impact of corporate governance upon the performance of rural cooperative banks. Through theoretical analysis and empirical test we reach the following conclusions:conforming to requirements of the economic development, all regions should actively promote shareholding reform of rural financial organizations; rural financial organizations should optimize equity structure, introduce major shareholders actively and centralize equity appropriately based on sticking to the diversification of investment agents and investment structure; rural financial organizations should improve decision-making mechanism, supervision mechanism and incentive-constraint mechanism of corporate governance, and bring the corporate governance restriction into full play; local governments should transform its role and decrease its intervention; rural financial organizations should improve external governance mechanism through the regulations of external governance environment and the establishment of effective external governance structure in order to make both internal and external governance of cooperative banking institutions play a joint role.