Research On The Improvement Of Corporate Governance Efficiency Of Industrial And Commercial Bank Of China

As the lifeblood of modern economy, Finance plays an important role in the development of the economy. Being the core of the financial institutions, commercial banks’development affects the macro-control on efficiency and the country’s financial security and stability.Therefore, the financial supervisory authority has attached great importance to corporate governance of commercial banks for a long time. The corporate governance has taken a series of measures and achieved remarkable results for 10 years from the joint-stock reform of the Industrial and Commercial Bank of China(ICBC). In this historical period, the summary and reflection of the past experience of corporate governance provide a great strategic significance for the development of the enterprise.Based on the property right theory, principal-agent theory and the stakeholder theory, this study, according to the particularity of commercial bank’s corporation governance, The study also focuses on its profitability,safety liquidity,and its growth opportunity. It takes the ROTA (Return on Total Assets),ROE,(Rate of Return on Common Stockholders’ Equity), farebox recovery ratio,non-performing loan ratio and some other indexes to build the evaluation index of the bank governance. In this study, ten indexes such as,the first big shareholder, proportion of tradable shares,ownership concentration degree,ownership balance degree,board size,and the size of the supervisory board. Which are regarded as the enfluence factors of the bank performance,will be will be selected the four aspects like, ownership structure, the board of the directors,the board of the supervisors and executivesFirst of all,this thesis describes the current situation of Corporate Governance in the Industrial and Commercial Bank of China, as the foundation for the subsequent analysis.Then, with 37 quarter sample data from 2007 to 2016 years,using principal component analysis with empirical method to verify ICBC corporate governance performance with the path analysis method to study the relationship between the corporate management structure and banks performance.The empirical study results show that the biggest shareholder’s shareholding ratio is significantly negative related to operating performance, while the ownership balance degree and the Independent Directors proportion is significantly positive related to operating performance.The size of the board of supervisors and external supervisor proportion is vital related to operating performance,and other factors play a role. So, ICBC should carry on the reform in share structure in depth,Improving the board governance mechanisms and optimization supervisory system, finallyestablish and improve the incentive mechanism of executive compensation.