The Influence Of Corporate Governance On The Synergistic Degree Of Dual Performance Of Rural Commercial Banks

All along,Rural Credit Cooperatives have undertaken the social responsibility of serving "agriculture,rural areas and farmers",and are the main force of China’s rural financial system.The new round of reform of rural credit cooperatives started in 2003 is actually a market-oriented and commercial-oriented reform and institutional change.Its central topic is to clarify property rights and redistribute the control rights of financial resources,and it gradually evolves into the transformation of rural credit cooperatives into shareholding system and gradually transforms them into Rural Commercial Banks(RCBs).From the perspective of market positioning,RCBs are positioned to serve "agriculture,rural areas and farmers" as well as small and micro businesses.During the reform process,it should not only follow the principles of marketization to achieve its own business sustainability,but also take into account social responsibility and provide inclusive financial services.Dual business objective is the biggest particularity of RCBs compared with other commercial banks.Corporate governance controls the distribution of rights,responsibilities and benefits of RCBs.Optimizing the governance structure of RCBs is conducive to promoting the coordinated development of their financial performance and social performance.To explore whether the financial performance and social performance of rural financial institutions can be coordinated development,and whether the current corporate governance structure of RCBs can promote the coordinated development of financial and social performance.This paper selects the survey data of 31 county RCBs in Jiangsu Province from 2012 to 2017 to conduct an empirical test.The main research contents and conclusions of this paper include the following two parts:The first part: the exploration and measurement of the synergistic relationship between the financial performance and social performance of RCBs.Firstly,using simultaneous equations model,under the premise of effectively controlling endogeneity,the internal relationship between financial performance and social performance is empirically analyzed.It is found that the financial performance and social performance of RCBs show an inverted "U" shaped relationship,that is,the dual performance can develop cooperatively within a certain range,if the range is exceeded,the two will produce a certain conflict.Then,the synergistic degree of the coupling between the dual performance was measured by using synergistic theories and methods,and the synergy relationship between the dual performance was further tested.The results of the coupling synergy degree show that during the sample period,the social performance of RCBs in Jiangsu Province is on the rise,the financial performance is on the rise and then on the decline,and the synergy degree of double performance is on the rise,which has formed a good level of synergistic development.But growth slowed in 2017,mainly due to a decline in financial performance.The second part: the analysis of the influence of corporate governance on the synergistic degree of RCBs’ financial and social performance.This part uses factor analysis method to integrate the variables related to corporate governance into structural factors,regulatory factors and incentive factors,and demonstrates the impact of corporate governance on the financial and social performance of RCBs and their synergies from the micro level.The empirical results show that the regulatory factors are positively correlated with the degree of synergies and dual performance.The exerting of the supervisory and management functions of the board of directors and the board of supervisors can promote the level of synergies of the dual performance of RCBs by coordinating the interests of all stakeholders.Motivation factor and structural factor has significant effects on bank financial performance is positive,the coordination degree of social performance and the performance of double effect was not significant,shows that reasonable compensation and equity incentive system can well transfer the bank executives the enthusiasm of social responsibility and to improve management,can effectively improve financial performance,but performance of double coordination level no obvious improvement;There is an inverted "U" shaped relationship between asset size and synergies,that is,when the asset size reaches a certain level,the growth rate of operating cost increases and diseconomies of scale appear.According to the conclusion of this paper,in further deepening the reform,the government should grasp the objective law and reform direction of the development of RCBs,adhere to the stability of the legal person status at the county level,attach great importance to and solve the problem of the synergism between the financial and social performance of RCBs in poor areas.In addition to increasing the supply of agricultural related loans,Jiangsu Rural Commercial Bank has also improved refined management,innovated products through supply chain finance and other ways,and improved the comprehensive income of agricultural related loans,so as to maximize the universality of financial services and enhance the level of dual-performance coordinated management under the condition of ensuring business sustainability.Jiangsu RCBs should further improve the incentive mechanism,improve the supervision system,include the social responsibility of supporting "agriculture,rural areas and farmers" into the performance appraisal of senior executives,and appropriately increase the proportion of deferred payment,which can stimulate the vitality of senior management and effectively restrict the long-term behavior of senior executives.Reasonably arrange the composition structure of the board of directors and the board of supervisors,strengthen the capacity of the board of directors to perform their duties,improve the supervision system,give full play to the supervisory and management role of the board of directors and the board of supervisors,and further promote the improvement of the synergistic degree of dual performance.At the same time,the empirical results show that the scale of bank assets in Jiangsu province and double performance coordination degree show inverted "U" type of relationship,so in the process of Jiangsu RCBs development in the future,not blindly focus of big business and big customer,but by optimizing the business model and improve the internal control system and mass service " agriculture,rural areas and farmers " group,at the same time improve the level of risk management,then through economies of scale to achieve the unity of the financial performance and social performance.