The Study On Governance Mechanism And Governance Efficiency Of Rural Credit Cooperative

Born from the early 1950s,rural credit cooperatives in China have reached limited success,even though they have suffered a lot for more than half a century.Up to now,rural credit cooperatives set up in the form of joint-stock cooperative system. Although some have reformed into rural cooperative banks,the problems like unclear property rights,weaken the internal governance,external governance mechanisms for the issue of missing has not been solved at all.Especially for the serious phenomenon of "internal control" and the lack of balance in power in rural credit cooperatives,the formerly established members of the General Assembly,the Council,and the board of supervisors exist in name only,and the managers of rural credit cooperatives have full control over the rural credit cooperatives,which can not stimulate the formation of an effective incentive mechanism.To rely solely on the improvement of the formal structure of internal governance can not solve the high agents cost and the defects of governance mechanisms in rural credit cooperatives.Starting from the transition of system in rural credit cooperatives,the principle-agency theory has been mainly utilized,and the special double agency relationship of rural credit cooperatives was analyzed.Meanwhile,the serious deficiencies in internal control mechanisms such as the lack of clear property rights and the main and severe internal control have been fully revealed.That demonstrated that it is the asymmetric information and incomplete contract under the separation of ownership and the right to operate that is the root of the insider-control risk.To solve this deep rooted problem,this paper tries to use the term "pre-commitment approach" as a better solution for the conflict between all stakeholders and Rural Credit Cooperatives and all directors.In addition,based on the process of governance efficiency optimization,the dynamic balance and optimization of the rural credit cooperatives based on incomplete contract theory has been explored and the optimizing mechanism of internal governance under model of co-governance of all stakeholders was systematically studied.Besides,on the basis of redefining internal governance efficiency and governance costs,this paper comes up with criteria for optimal internal governance efficiency from the perspective of cost and revenue,acting as helpful reference for rational allocation and the improvement of Rural Credit Cooperatives' governance efficiency.Meanwhile,trying to apply AHP to the construction of Rural Credit Cooperatives' internal governance criteria system,the paper aims at carrying out objective evaluation over the internal governance capability of all Rural Credit Cooperatives around Shandong Province based on the use of IG-ANP.Finally,starting from analyzing the structure characteristics of Shandong Rural Credit Cooperatives' internal governance,the artical revealed the internal relationship between internal governance structure and business achievement,able to select the indicators which reflect the overall level of Shandong Rural Credit Cooperatives, and based on the analysis of all operation factors and the statistical analysis software SPSS,conducted a comprehensive evaluation for 17 city-level Rural Credit Cooperatives' developing condition using the method of cluster analysis,as well as explored possible channels for Rural Credit Cooperatives to enhance internal governance mechanism and governance efficiency under new national reforming environment,in terms of identifying the property rights,optimizing the equity structure,improving the balance mechanism and etc.which provides powerful support for the solution of virtual property and "insider control" in Rural Credit Cooperatives.