Influence On The Performance Exerted By The Board Governance Of China’s Listed Commercial Bank

The theory of corporate governance has been developing and perfecting for years,however, the research of the bank part is still exploring in which the research of boardgovernance is rather behind. Most research papers on corporate governance cover thewhole industry, while the particularities of the bank industry limit the effect of generaltheory. As the inner core, the board governance plays an important role in the bankindustry. With the transforming from state-owned to joint-stock system, the operatingmechanism of bank is reforming step by step, so the governance of bank board is ofgreat emergence for China.While starting from the aspect of corporate governance, I am trying to analyzeshareholder together with other factors that play an important part in the externalgovernance. Comparing banks to other general corporations, we can find that theparticularities of bank governance lie in the discovery that the external governanceabout general corporations doesn’t fit much into the framework of bank governance.Then, I am trying to find the influence on bank’s feature exerted by the boardgovernance. Using factor analysis method, we divide all the factors which influencebank’s feature into two categories, fluid factors and profitability factors. Then wecalculate the comprehensive score of every bank in the market by using the method ofweighted mean and take the score as an indicator that measures bank operatingfeature.The characteristic factors that influence the board governance include thescale of the board, the proportion of independent director, the director shareholdingratio and the times of board meeting. We make a multiple regression analysis aboutthese characteristic factors and the operating feature of these banks. We find aninverted U relation between the scale and operating feature, the director’s quality ispositively related to operating feature and inefficiency of the board meeting lowersbank’s feature. In the meantime, lower proportion of independent director and lowerboard equity incentive are negatively related to bank’s feature. In the last part of thispaper, we try to give some policy suggestions according to the problems exist in theboard of directors.