The Empirical Research On Board Governance And Performance Of Our Country’s Commercial Bank

In recent years, our country’s economy has slowed down. Internet Finance is springing up and eroding territory of traditional commercial bank gradually. Under the new situation, it is a big problem that how to make commercial banks develop sustainably. The transformation of traditional commercial banks is imminent, it is not only the innovation of business and products, but also to the transition of the management idea and pattern, more need to improve internal governance of commercial bank. As the core of the internal governance of commercial banks, it is the most important to improve governance of the board in deepening internal governance reform in the future.Based on the background above, this paper summarizes the related theories and literature of board governance. Then, we selected 18 major commercial banks in China as samples, to build a model using the unbalanced panel data, in order to do empirical study on the relationship between board governance and operating performance of commercial banks by Stata. The empirical results indicate that the board governance is perfect or not directly affect the operating performance of commercial banks. In particular, board independence and proportion of older members in the board have more significant impact on operating performance of commercial banks than other. Although, the scale of the board, times of the board meeting, proportion of women members in the board are all not significant to operating performance of commercial banks. But, improvement of these indicators still has some significance to promotion of board governance. To some extent, excessive executive pay strengthens the bank’s risk-taking behavior, which is detrimental to the performance of commercial banks. On the basis of summarizing the empirical conclusions, we put forward the proposal on improve board governance of commercial bank. Firstly, optimize members of the board, strict with access to the board, promote rejuvenation of board members and paying more attention to the participation of female members in the board decision making, thus improve the ability and vitality of the board. Secondly, to further promote the system of independent director, then improve board independence of commercial bank, ensure that the independent directors can earnestly fulfill its responsibilities. Thirdly, select an appropriate scale of the board to improve the efficiency of decision-making. Finally, a more appropriate salary incentive mechanism should be established in order to motivate the members of the board under the constraints.