Research On Corporate Governance Of L Rural Commercial Bank

As an important part of China's banking industry,rural commercial banks bear the responsibility of the main force of rural finance.The predecessorpqrs of rural commercial bank are the rural credit unions established in the 1950 s.The rural credit unions have experienced a major change from collective ownership to cooperative system,and then to the joint-stock system.The nature of their property rights is constantly changing.Most of the county-level rural credit unions have been transformed into the incorporated companies of county-level rural commercial bank,gradually building a modern corporate governance system.However,it should be noted that the reform and establishment of rural commercial banks do not take long,corporate governance is in the stage of continuous exploration,and the practical experience of corporate governance is not rich.Due to the property right structure,the management system of rural commercial banks and so forth,the corporate governance of rural commercial banks is "similar" rather than "lifelike".With the continuous decline of economy,the marketization of interest rates,the rise of financial Internet,the intensification of industry competition,the weak capital strength of rural commercial banks,the lag of financial technology development,the lack of risk control capability and so on,there is an urgent need to improve corporate governance from the top level for promoting the sustained,steady,healthy and safe development of rural commercial banks.This paper combs the reform and development of rural commercial banks,and analyzes the property right structure and management system changes of rural commercial banks.The author thinks that the most important influencing factors of their corporate governance are the property right structure and management system.he expounds the three main management modes of modern rural commercial bank,including provincial unified corporation,independent provincial corporation and independent county corporation,and provincial union but with independent city or county corporation,and analyzes these three modes.Three county-level rural credit unions(rural commercial banks)were merged to form L Rural Commercial Bank in 2017.Based on the theories of corporate property rights,agency by agreement and asymmetric information,incentive and restraint and so forth,this paper tries to analyze the present situation of corporate governance of L Rural Commercial Bank,and systematically sorts out the existing problems: the formalized phenomenon of corporate governance,the excessive decentralized ownership structure leading to the lack of owner's management,the difficulty for the board of directors to play the decision-making function effectively,the current management system leading to the lack of independence of corporate governance,its managent level needing to be improved,the failure of its professional committee to perform duties,the lack of incentive restraint from shareholders on executives,information disclosure not sufficient and so on.According to the above theories,this paper puts forward the ways and methods to improve corporate governance: defining the goal and avoiding the formalization of corporate governance,timely introducing strategic investors and reforming the corporate governance structure,strengthening the construction of the board of directors and comprehensively implementing its functions and powers,clarifying the management relationship to ensure the relative independence of corporate governance,enhancing professional training and performance evaluation to improve the governance level of directors and supervisors,intensifying the restraint of incentive from shareholders on executives,revealing effective information,and strengthening the supervision of all parties concern.