Corporate Governance Of State-controlled Commercial Banks

The financial industry is the core of modern economy, the financial sector has grown rapidly and played an important role in optimizing the allocation of resources, supporting economic reforms, promoting the stability and rapidity of economic development and safeguarding social stability. After the accession to the WTO, China's financial sector has speeded up under the strong competitive power from abroad, which leads to the rethinking of their development model and governance structure. Reform of commercial banks is the focus of financial sector reform, the four state-owned commercial banks (Bank of China, ICBC, China Construction Bank, Agricultural Bank of China) is the key to reform too. The objective of China's state-controlled commercial bank's reform is to transform them into a modern financial enterprise and construct a reasonable corporate governance structure. The success of its reform is directly related to the overall national economic development.In this paper, the basic theory is Separation of ownership Theory, Principal-agent Theory and Stakeholder Theory. First of all, analyze the corporate governance of State-owned commercial banks and introduce the relevant guidelines for corporate governance. Secondly, from the analysis the historical evolution of State-owned commercial banks, combined with its development status, analyze the internal and external defects of State-controlled commercial banks. Thirdly, introduce the main mode of corporate governance in advanced foreign commercial banks—Anglo-American model and the German and Japanese models, which is based on the analysis of present situation and defects. And conclude the reference which is benefit for State-controlled commercial bank's corporate governance.Finally; conclude the recommendation of State-controlled commercial bank's corporate governance: Establish the State-owned Financial Assets Supervision and Administration Commission, which is considered as a new model of investment for State-owned financial assets. Analysis the characteristics of governance structure from the point of internal governance structure, and analysis the system of Independent Director and the relationship of "The new Three" and "The old Three" emphatically. Diversify the Incentive system and combined short-time incentives with long-time incentives. Emphasize the role of Equity Incentive for the Executives. Proposed the means of external governance—perfect the disclosure mechanism, strengthen the legal system, emphasize the role of external governance from the angle of external governance environment, which provide a reference framework for internal and external governance of State-owned commercial banks.The important role of State-owned commercial banks in financial system determines the combination of domestic and international experience in order to construct a reasonable framework for corporate governance. Suppose a practical proposal for the development of State-owned commercial banks in order to promote the rational development of State-owned commercial banks and increase its important role of China's financial reform.