Research On Principal-agency Problem And Incentive Mechanism Of State-held Commercial Banks

Principal-agency in modern enterprise system shows that the separation of enterpriser and manager has created separating of power which the surplus to be come down on and power which surplus control. Asymmetric information happens, and owing to information asymmetric the principal of enterprise is faced with the problem how to supervise and encourage the agent to serve for himself,and the payout to solve this problem is agency cost. At the same time, the agent can maximize his interest with the aid of the information advantage while sacrificing principals'interest,and it is difficult for the principal to know the differentiation of the objectives. In order to urge the objective of agent approaching to that of the principal and achieve the maximization of the enterprise value and also guarantee the interest of agent, it is very important to build up suitable mechanism of incentive and constraint.The state-owned commercial banks play the role of monopoly in Chinese commercial banking system. Large-scale reforms are also being executed inside the commercial state banks. The four commercial state banks all make great efforts in reforming the juridical-person-administrated mechanism by taking such measures as reconstructing, reforming the mechanism, introducing strategic investments, etc. Among them, trying to construct a mechanism of effective incentive and powerful constraint is a very important reform. However, the reform is a gradual progress and cannot be accomplished in one action. The commercial state-owned banks have not established a real scientific and systematic incentive and constraint mechanism so far. The reform of mechanism builds the foundation of all reforms. In the new economic situation the commercial state-owned banks have to make fundamental reforms on the mechanism of incentive and constraint in order to remain stable and get the goal of keeping and increasing the value of the state-owned capital in the competitions which gradually become tougher and tougher.First, it indicates the problems of principal in the state-held commercial banks. Such as the Huijin investment corporation had not fulfilled its function of principal, and indicates the new chain of principal-agent which the state-held commercial banks face now. In the following part, we focus on the setting up mechanism of incentive in order to improve corporate governance. Finally, it gives some suggestions to solve that problems.