Research On The Impact Of Board Governance Of Chinese Listed Commercial Banks To The Risk Management

The global financial crisis and the European debt crisis has made the risk management of commercial banks more and more important. The Basel committee therefore launched the "Principles for Enhancing Corporate Governance" in October 2010, pointing out that sound corporate governance depends on efforts of the board of directors. After a month, it pushed the "Basel Ⅲ", increased the capital requirements of banks, aiming at improving the risk management. In 2011, the CBRC launched the "China Banking Regulatory Commission guidance on the implementation of the new regulatory standards". It improved the banking prudential regulatory standards, and strengthened the supervision of capital adequacy, liquidity risk and loan loss provision. In 2013, the Chinese government issued "The management approach of personnel qualification of directors and senior management of banks".It pointed out the qualifications and responsibilities of the board and executive management. Therefore, we can see the importance of improving the board governance and the risk management in commercial banks. At the same time, researches about the impact of board governance of commercial banks to the risk management are very limited, this paper could make some theoretical significance on enriching the research in this field.Firstly, according to the characteristics of the risk of commercial banks, this article selects 12 indexes of evaluation, calculates a score by factor analysis, and makes it on behalf of risk management. Secondly, according to the characteristics of board governance, this article selected 18 indicators as explanatory variables from the structural characteristics, quality characteristics, stability characteristics, motivation characteristics and behavioral characteristics. Again, some of the variables have nothing to do with the governance of the board of directors, but will cause interference to the research results. This paper makes them (a total of 8 indicators) as control variables, to weed out their influence on the research results. Finally, this paper uses multiple linear regression model to make empirical analysis of the above variables, and draw some conclusions.The conclusions are that:risk management capabilities of commercial banks were getting poorer from 2008 to 2010, after that it was getting better. In the structure of the board of directors, the proportion of independent directors is positively related with the ri sk management, the greater the value of the index, the higher the level of risk management. In the quality characteristics of the board of directors, the conclusion is that an appropriate increase of age and education can significantly improve risk management. In the stability characteristics of the board of directors, the conclusion is that an appropriate reduction of the tenure and keep the chairman unchanged in annual can significantly improve risk management. In the incentive characteristics of the board of directors, the conclusion is that an appropriate increase of allowances and stock options can significantly improve risk management. In the behavioral characteristics of the board of directors, the conclusion is that improving the performance of duties of the board can significantly improve the risk management. Among the control variables, the size of banks is negatively related with the risk management, illustrates that the larger of the size of banks, the lower of the risk management.