Research On Governance Structure And Executives' Incentive And Constraint Of Commercial Bank In China

The agency problems between managers and shareholders are always the emphasis of corporate governance theory. Especially for the banking sector, human capital has important influences on their performance. In the past, the banks in China had been impeded for the imperfect system and improper supervise. In recently, the frequent financial scandals of managers in banks make people pay great attention to incentive and constraint of managers. To establish rational internal and external corporate governance mechanism and effective incentive and constraint for managers is the important subject in the reform of banking governance.In the frame of corporate governance structure, this paper discusses how to develop effective incentive and constraint mechanism for managers. By making several kinds of performance indexes, the paper discusses the characteristics of corporate governance structure and their impact on executives' incentive and constraint, from the structure of ownership, the remuneration of managers and board system. For the aspect of the structure of ownership, the concentration ratio and stockholder ratio are minus related to the achievement of banks, but effect of foreigner stockholders is not clear. About the remuneration of managers, we find the remuneration emphasize on profit ability and ignore the ability of growth and explanation of banks. In the aspect of supervise of the board system, the board scale is plus related to the bank achievement, but independent directors have not given managers valid supervise. Against the above problems, the paper gives some suggests on the reform of corporate governance in Chinese banks at last.