Corporate governance structure of listed commercial banks in China to study of the effectiveness of internal control
|School||Chongqing Technology and Business University|
|Keywords||Listed Commercial Banks Corporate Governance Structure Internal control Effectiveness|
This paper introduces the theory of corporate governance , the distinctiveness of the corporate governance and the newly issued objectives of the internal control of Chinese commercial banks ,and then analyses the condition of the corporate governance structure and the internal controls concerning the listed commercial banks in China , at the same time, with the theory of corporate governance and research of the scholars home and aboard, we selected the related data from the listed commercial banks during 2005-2009.this paper studies the ownership structure, capital structure, the mechanism of checks and balances and so on (ie. The mutual supervision and counterbalance among shareholders ’ Conference - Board - Manager - Supervisory Board ),which have a influence on the effectiveness of internal control, that is, the influence of the profitability , quality and liquidity of the assets. Thus we propose the hypotheses of this paper, build a multiple regression model as to test the theoretical hypotheses and propose the recommendation on improving the effectiveness of internal control of the commercial banks. The results of empirical research show that: (1)Director and President as one entity ,both the scale of Directors and staff supervisors and the incentives mechanism reflected by the salary of the top tree shareholders was significantly and positively correlated with the asset profitability; the whole shares of the top three shareholders which reflects the degree of equity concentration , Independent Board of Directors and Board of Supervisors show significant negative correlation with the profitability of assets, checks and balances of equity and financial leverage which reflects the asset structure have a positive influence on the profitability of assets but not significantly. board meeting of director and supervisor have negative influence on the asset profitability .(2)Equity concentration , the scale of Independent directors and financial leverage are significantly and positively correlated with non-performing loan ratio which reflects the quality of assets ; the degree of equity check and balance does not still play any role. Both the scale of Board of Directors and of the Board of Supervisors and board meeting of director and supervisor have a significant negative correlation with the non-performing loan ratio ,while the staff supervisor have a negative correlation with non-performing assets, but not significantly; as a whole of two position ,the salary of the top three shareholders and checks and balances of equity have positive but not significant correlation with non-performing loan ratio.(3) the scale of Board of Directors , the salary of the top tree shareholders and financial leverage are positively and significantly correlated with assets liquidity; the scale of Independent Board of Directors , Board of Supervisors and staff supervisors negatively and significantly correlated with assets liquidity; equity concentration, check and balance degree of equity, a whole of two position and board meeting of director and supervisor have no significant correlation with asset liquidity.