The Affect Of The Governance Structure Of Chinese Listed Commercial Banks On Bank Performance

Since1978, the Third Plenary Session of China’s economic reform has been more than40years, from the initial ownership and distribution system reform, improving labor enthusiasm of the workers and peasants to introduce stock and financial markets, improve corporate form of ownership and management, promote the rational allocation of resources. Now, in the fierce competition in the international market, China, as the world’s second largest economy, the impact on the world economy is growing, our full respect, deep-seated commitment to reform is growing, more and more efforts depth. In today’s global marketplace, the financial sector because of its special characteristics of the industry, with capital flows and mobilize all social forces allocation of resources, the impact of the national economy has increasingly become indeed affect the whole body of the industry, the financial crisis of recent years no not occur around the financial industry. In a highly integrated global resources, resource management technology is increasingly becoming a key competitive success, and corporate governance as a direct and underlying causes of overall enterprise management, has been the focus of practitioners and theorists of attention.China’s current market economy is a developing market economy, with a strong socialist and developing countries imprint imprint, China’s financial sector is dominated by the banking sector as a corporate governance structure of China’s banking industry was in the1990s before officially on track. Under the circumstances of this particular governance structure necessary to China’s banking industry has its free development of the banking sector is different from the Western countries, a significant feature of these differences is both a sign of China’s banking industry constantly evolving, but also to a certain extent on our current to adapt to the market economy status and economic status. On the ownership structure, the ownership structure of the banking industry in general is more concentrated, five state-owned banks have a problem exists due to the dominance of state-owned shares, the lack of independence of the Board, a low level of due diligence independent directors, board of supervisors useless, not a good balance other large shareholders and the board issue. The innovation of this paper is to present China’s banking industry in order to verify whether the governance role in promoting bank performance improvement, we are on the full sample of16listed banks on the basis of data analysis, respectively, according to the state-owned commercial banks, joint-stock commercial banks and city commercial banks three different levels of the bank were analyzed, and the results of these three banks to compare different ownership structure, in comparison to a clearer analysis of the governance structure of the variables on the role of bank performance.Firstly, to be detailed in the theoretical foundation of corporate governance, in a clear theoretical foundation of corporate governance after the development of the corporate governance structure of listed commercial banks to make a brief description, through the development of China’s commercial banks to make a corporate governance structure let us briefly review a deeper understanding of the regional situation and the times and the corporate governance structure of the Bank Introducing the status quo Corporate Governance in China, we will bank governance into shareholding structure, board structure, the structure of the Supervisory Board, the external monitoring system and information disclosure system of these five areas and found the shareholding structure of listed commercial banks has the following characteristics:state-owned banks high ownership concentration, due to the dominance of state-owned shares; joint-stock banks more dispersed ownership structure; higher ownership concentration City firm. Due to the structure of the Board of Directors and the Supervisory Board have strict provisions of the Act, it is the difference between the state-owned line between joint-stock banks and city commercial banks is not large, but somewhat different, due to the state-owned Bank and the City firm’s largest shareholder is the government the independent directors nominated by a major shareholder, so firm in the state line and the city, the independence of independent directors is poor, but a higher average education; while joint-stock banks are mostly corporate holding, management is more market-oriented, independent directors be independent strong, but the average education level may be lower than the state-owned line. External monitoring system and information disclosure institutionally-owned Bank of China’s listed commercial banks joint-stock banks and city commercial banks are subject to information disclosure system of the China Banking Regulatory Commission and the stock exchange regulatory constraints, there is no explicit distinction. Executive incentive institutional, state-owned banks by the CICC holding, City firms controlled by local governments, wage incentives in executive pay more, and less equity incentive while larger fluctuations in the joint-stock bank executives salary range, incentive mechanism more perfect.In the present situation and characteristics of clear governance structure of the bank after three years2009-2011based on16listed commercial banks data from the shareholding structure, board structure, the Supervisory Board and executive incentive structures of these four aspects of the16listed commercial full sample data bank for statistical analysis and empirical testing, after the draw general conclusions, these16commercial banks by the state-owned shareholding structure is divided into rows, joint-stock banks and city commercial structures were analyzed with their respective characteristics and bank governance different affect performance, in-depth analysis of the governance structure comparison of characteristics distinguish different ownership structure of banks and their impact on each bank performance results.Through theoretical and empirical analysis, we draw the following conclusions:(1) the relative concentration of the shareholding structure of state-owned banks on bank performance showed the reverse effect, and significantly greater than the relatively low concentration of ownership of joint-stock banks; scale (2) The Board of the Bank the existence of a positive impact on performance, but the impact on the size of the board of state-owned banks to be less than the impact on bank performance of joint-stock banks;(3) the proportion of independent directors has positive impact on bank performance, but the proportion of independent directors of state-owned banks to bank performance impact of joint-stock banks independent director proportion is less than the impact on bank performance;(4) executive pay and bank performance showed a positive correlation between executive pay, but state-owned banks to bank performance impact factor significantly less than the impact of the joint-stock bank executive pay coefficient; proportion (5) and the Supervisory Board of stake holdings of bank performance is positively correlated, but the correlation between the line representing the correlation between the state-owned joint-stock banks big; proportion of managerial ownership and bank performance is positively correlated but the state-owned line correlation coefficient correlation coefficient smaller than the joint-stock banks.According to the theoretical analysis and empirical testing of this paper, this paper argues that there China’s state banks, joint-stock banks and city commercial corporate governance structure quite different, they have different effects on different characteristics of each bank performance, corporate governance structure of joint-stock banks more market technology, but also help promote bank performance improved, the shareholding structure of state-owned banks should be more market-oriented.