The Impact Of Cross-listing On Corporate Governance And Performance

Cross-listing is a topic of concern in the current China’s securities market. This paper firstly summarizes the theory of cross-listing and Chinese commercial banks, then analysis the case of ICBC in detail. The case is mainly about the process of cross-listing and changes in corporate governance mechanism and performance after cross-listing. This paper argues that, cross-listing can lead to changes of corporate governance mechanisms of ICBC, improving the financial performance of enterprise. Cross-listing lead to changes of the regulatory environment and then make a successful innovation of governance mechanisms in the state owned bank, reverse the original shortcomings and improve the competitiveness of enterprises.This paper begins with an overview of the relationship between cross-listing and corporate governance and corporate performance, summarizing the theories of some scholars. These can be seen the theoretical basis of case analysis of the ICBC. Commercial banks in China have been in a fast profit status in recent years. Many commercial banks reform the corporate governance and corporate performance through Joint-stock reform. This article describes the basic situation of ICBC before the listing, including corporate governance and corporate performance, as a reference to the changes of ICBC. Next, this paper carried out a detailed analysis of the cross-listing of the ICBC, including the reorganization before the listing, the equity structure, and the performance of corporate governance and corporate performance after the listing. During the analysis of changes in the corporate governance mechanism, this article is to analyze external the mechanisms and internal governance mechanisms. As for the external governance, more stringent regulatory environment bring external pressure, the most important aspect is to enhance the level of information disclosure. As for the internal governance, we show the changes in internal governance mechanisms from corporate governance structure, directors and senior management and operators’ incentives, risk management and internal control. Finally, we analysis the financial performance of ICBC after listing. Three groups of financial indicators selected are profitability indicators, safety indicators and liquidity indicators. Through the analysis of these indicators, the cross-listing of ICBC not only improve profitability, enhance the quality and liquidity of the assets. Concluding speaking, cross-listing can have a positive impact on the commercial banks’ corporate governance mechanisms and corporate performance, this article has played a certain reference value for cross-listing of commercial banks and companies in China.