Foreign Independent Directors And Performance Of China’s Listed Banks

It might be universally acknowledged that independent directors, as one of the effective governance mechanism, have an important impact on corporate performance. It can improve governance ability and company’s value. Few studies have been researched on the relationship between the nationalities of independent directors and corporate performance. So this article chose Chinese commercial banks which have been employed a large proportion of foreign independent directors, then examined whether foreign independent directors play a governance effect role or not.In Chapter1, the background of this paper has been described; the ideas and research framework have also been introduced. This chapter also elaborated the choice of research methods, and finally explained the advantages in this paper.In Chapter2, two aspects of this topic were summarizing based on existing research results all over the world:independent directors and bank performance.In Chapter3the theory way of foreign independent directors impacting on bank performance was analyzed.In Chapter4, the employment background and current situation of foreign independent directors were described in China’s listed banks.In Chapter5, on the basis of the analysis before, this paper get two hypotheses. Colleting samples which were composed of China’s listed banks and testifying the rationality of hypotheses, this paper pointed out the conclusions: foreign independent directors can lead to the improvement of bank performance significantly.Chapter6provided the conclusions of the research. Moreover, it pointed out the prospects. Then three suggestions were proposed according to actual situation which making the research more significant in practice.There were two mainly innovations in this paper:First of all, we analyzed the impact of foreign independent directors on bank performance, expanded the research on the governance perspective; Next, we chose the banking industries as the research object, rich utility scopes of the independent directors.Apparently, there were some limitations in this paper:Firstly, we only chose banking industries instead of all listed companies, exercising a great influence on the breadth of the sample. Secondly, the current study just prove a positive relationship, failed to prove a direct causal relationship. Thirdly, lack of some important control variables might lead to inconsistences with the actual situation.