Research On Corporate Governance Optimization Of The City Commercial Bank

The first city commercial bank in China was established in 1995.From then on,it naturally bore the responsibility of serving local economy and small and medium-sized enterprises.Based on the city credit union,it proceeded the shareholding reform.Through the 20 years growth,the city commercial banks’ overall development trend is vigorous,besides,it had an increasingly prominent performance in the aspects of the asset size and the capital adequacy.However,with the frequent risks of urban commercial banks in China in recent years,corporate governance has been paid more and more attention.Since the contractor bank was taken over in may2019,its serious deficiencies in corporate governance have been made public,and the reason behind the risk outbreak of many urban commercial banks is the problem of corporate governance.This paper explores the current situation of corporate governance of the city commercial bank,it’s found that the leadership of the Party has been strengthened,the constituents of the board of directors need to be optimized,the ownership concentration shows steady trend of decline,and the regulatory indicators have increased.But some deficiencies were also found in the ownership structure,the performance of the general meeting of shareholders,the board of directors and supervisors,the Communist Party’s leadership and also the supervision effectiveness.Due to the severe deficiencies in corporate governance,the Baoshang Bank had serious credit risks and then was taken over.Looking at the current situation of corporate governance of the city commercial bank,we can find that they have the same problems as Baoshang Bank in terms of ownership structure,board of directors and supervisors,The Communist Party leadership and regulatory effectiveness.Baoshang Bank was taken over due to the serious credit risk caused by many deficiencies in corporate governance,and after analyzing the current situation of corporate governance of the city commercial bank,it can be found that there are deficiencies in the performance of the board of directors,the leadership of the party,the management of shareholders’ equity and external supervision.Therefore,in the optimization of corporate governance,the takeover of Baoshang Bank has brought enlightenment to the city commercial bank.In the last,based on the case analysis of the takeover of Baoshang Bank,this paper proposes some optimization suggestions in order to improve the corporate governance of the city commercial bank.Through the analysis,it is found that the takeover of Baoshang Bank bring enlightenment to the corporate governance of the city commercial bank,which are as following: in the first,optimized equity structure is the basis of corporate governance.Secondly,the key to corporate governance is strengthening the accountability mechanism of the board of directors.Thirdly,the core of corporate governance is strengthening the Communist Party’s leadership.Fourthly,it’s the external guarantee of corporate governance that improving the pertinence of supervision.Optimized suggestions can be summarized as follows: in the first,the ownership structure should be examined permeably,so as to avoid related shareholding and other issues.It’s necessary to strengthen equity management and thoroughly check the qualification of shareholders,to protect the interests of the bank itself and minority shareholders,and bring about the sustainable and healthy development of the bank.Secondly,complete the mechanism of corporate governance,besides,the accountability mechanism of the board of directors should be strengthen,to effectively supervise the performance of the functions of the board of directors.Thirdly,the responsibilities of the party committee and the board of directors should be clarified,and the core leadership of the Communist Party in corporate governance should be implemented.Based on the principle that the Party is the core of leadership,to improve the corporate governance mechanism.Fourthly,strengthen the corporate governance factors,and add some corporate governance supervision indicators,to improve the pertinence of supervision.