Study On Rural Commercial Bank Corporate Governance's Impact On Business Performance

Rural credit cooperatives is an important part of our country's financial system, which is one of the main rural financial services and plays an important role in supporting the development of agriculture, rural areas and farmers. Because of the problems such as unclear property right, internal management confusion, rural credit cooperatives develop restrainedly. As the main reform mode of rural credit cooperatives, rural commercial banks have passed more than ten year, most of which have built up modern property right system, internal management ability has improved. Enterprise development power comes from the enterprise vitality, Corporate governance can release the internal energy, directly affects the operating performance of rural commercial bank. Therefore, in the key period of reform, it is a must to research the corporate governance system comprehensively and systematically, to ensure the improvement of rural commercial bank management performance. However, in the actual reform around, there are three different organization form of rural commercial bank namely county-level rural commercial bank, prefecture-level rural commercial bank, and provincial-level rural commercial bank. Different organizational forms of the rural commercial bank corporate governance are different, which affect its business performance. Hence, based on the corporate level, this paper divide three kinds of organization form of rural commercial bank into county-level rural commercial bank and above the county level rural commercial bank, and compare the two types of rural commercial bank in corporate governance and operating performance difference.Modern property right theory and principal-agent theory is the theoretical basis of this article. Modern property right theory emphasizes the importance of clear property rights, which asserts property right system arrangement is the foundation of corporate governance. Principal-agent theory emphasizes the construction company of the equilibrium relationship between principal and agent, which asserts the equilibrium relationship between the board of directors and the board of supervisors and senior management affect the effectiveness of corporate governance. Different organizational forms of bank capital and asset size differences can also lead to the difference between corporate governance and operating performance, to test and analysis of this relationship, this article selects 31 rural commercial bank as the analysis object, divides the corporate governance structure into Ownership structure, board governance, governance of the board of supervisors and management equity, rural commercial bank organization, from this five aspects to research corporate governance's impact on business performance.Secondly, by using financial analysis index system and DEA model to measure rural commercial Banks operating performance, compare the business performance of county-level rural commercial bank and above the county level rural commercial bank. Finally, use Tobit regression to analyze different organization form of rural commercial bank corporate governance characteristics and differences, as well as the impact on business performance. In conclusion, there is significant relationship between proportion of the first largest and top ten shareholders, legal person share proportion, independent directors, executive officers holding, assets and the sample bank's performance. The county-level rural commercial bank's performance is better than above the county level rural commercial bank. The revelation is we cannot use a fixed way to decide to form a rural commercial bank, according to local actual to form different patterns of rural commercial bank. County-level rural commercial bank should actively introduce legal person share and strategic investors, expand the scale, strengthen the incentive to improve executive shareholding. Above the county level rural commercial bank should pay attention to the problem of equity concentration, the introduction of diversified investment main body, keep the balance of the equity structure and protect the interests of minority shareholders.