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Focusing on the dichotomous and comparative analysis of the legitimacy, paradigm, and operating frames of bank governance and its reproduction in the new financial regime following the global financial crisis, this book examines in depth how corporate governance in bank institutions is legitimized, justified, and delivered in diversified financial models and their influences on the Chinese banking industry. By combining this type of financial model analysis with the new institutionalism theory, the book lifts the mysterious veil from corporate governance in Chinese banking institutions with regard to its establishment and constant changes. Through a kaleidoscope lens and by conducting a “layer by layer” diagnosis, the book tells the “background stories” of the complex settings for Chinese financial institutions, asks and answers the paradigmatic question of for whom banks are actually run and governed, and mind-maps the main corporate governance mechanisms and practices prevalent in Chinese banks.

Inhaltsverzeichnis

Frontmatter

Theoretical Framework in Corporate Governance of Banking Organizations

Frontmatter

Chapter 1. Introduction

Abstract
As the post-2007 global financial crisis has unfolded, renewed attention is being paid to defects and deficiencies in corporate governance of banking organizations. Such attention is, to Mary Shelley’s phase, part of a wider questioning of how these man-made financial giants have turned into the monster of Bankenstein.
Weikang Zou

Chapter 2. A Discursive Institutional Approach to Corporate Governance

Abstract
In contrast to the extant literature on corporate governance, this chapter sets out an alternative approach which reinvigorates the implicit institutionalism of the variety of capitalisms (VoC) literature by drawing, in particular, on the recent development of discursive institutional theory. It is an approach that is taken in order to further interrogate the processes through which nationally diverse corporate governance arrangements are actually constituted over time and across space.
Weikang Zou

Corporate Governance in Banking Organizations: Legitimacy

Frontmatter

Chapter 3. Legitimizing Corporate Governance in Banking Organizations

Abstract
Innovatively combining the institutionalism theoretical framework and the category of the VoC analysis, as prepared and developed in the last chapter, this chapter explores the institutional embedment for corporate governance in banking organizations in varied financial/governance models, i.e., the Anglo-Saxon model, the Continental model, and the State-affected model. Justified as the legitimacy background, institutional settings frequently play a fundamental role in producing and reproducing corporate governance in banking institutions in different financial models which, not infrequently, embrace the complicated relationship between the bank and the real economy, the approaches of the financial regulation and posture of the regulators, the role of the court, and the international influences.
Weikang Zou

Chapter 4. Legitimacy of Corporate Governance in Chinese Banking Organizations

Abstract
Continuing the institutional analytical framework of discursive institutionalism and variety of capitalisms on the study of corporate governance in banking organizations, this chapter offers an in-depth analysis on the legitimacy discourses of bank governance in Chinese institutional context.
Weikang Zou

Corporate Governance in Banking Organizations: Paradigm

Frontmatter

Chapter 5. Paradigm Discourses on Corporate Governance in Banking Organizations

Abstract
Continuing the discursive analysis on corporate governance in banking organizations, this chapter explores the production of bank governance at the paradigmatic level, namely the models.
Weikang Zou

Chapter 6. The Paradigmatic Analysis on Corporate Governance in Banking Organizations in China

Abstract
Following the previous chapters on the legitimacy analysis in corporate governance of Chinese banking organizations and the discourse study on generic banking organizations around the world, Chap. 6 considers in particular the paradigmatic discourses which are at work in constituting the key orientations of bank governance in Chinese context.
Weikang Zou

Corporate Governance in Banking Organizations: Frame

Frontmatter

Chapter 7. The Board of Directors in Bank Governance in China

Abstract
Putting together the puzzles from all the previous chapters, this chapter starts to explore and explain how the discourses of legitimacy and paradigm, as discussed in Chaps. 3, 4, 5, and 6, are manifested in the specific governance structure in Chinese banks. Reflecting on the production of the board of director in generic corporations then banking organizations, the chapter studies specifically the organization and behavior of the board of directors in Chinese banks, which embraces the orientation of the bank board, its composition, the board size and its independence. Illustrating the hybrid nature of the paradigm discourses of the enhanced shareholder primacy and diversified stakeholder theory and relevant legitimacy discourses, the board of directors in Chinese banks are observed to be heavily guided toward sustainable profitability to the shareholders, active support for economic development, and balance of interests of various stakeholders. Similar representation of discourses of legitimacy and paradigm is demonstrated in the board composition, the board size, and the board independence in Chinese banking industry.
Weikang Zou

Chapter 8. Financial Regulation on Executive Pay in Chinese Banks

Abstract
The regulation on executive pay, as another leg of frame discourses in corporate governance in banking organizations, has drawn special attention ever since the 2007–2009 financial crisis and becomes actually the key of financial reforms across different model countries. It is in this context that this chapter reviews and explores, reflecting upon the implication of varied paradigms and legitimacies as discussed in the previous chapters, the pay regulation in varied model countries, which embraces the theoretical grounds for regulation on executive pay, the different elements in the executive compensation package, and diversified regulatory measures employed by varying model countries. This enables the chapter to continue to study regulation on executive pay in Chinese banking organization, which pertains to the specific composition of the executive remuneration, specialized regulatory mechanisms and arrangements, and increasing coordination between Chinese banks and financial regulators.
Weikang Zou

Chapter 9. Risk Management System in Corporate Governance in Banking Organizations in China

Abstract
As a pivotal component in corporate governance in banking organizations, risk management has become particularly visible in the context of the 2007–2009 financial crises, the failures of which are said to be the main cause of the overwhelming financial avalanche. Indeed, risk management has become the heart of financial reform and sound bank governance in the aftermath of the financial crisis all over the world. Based on in-depth analysis of prevalent risk management arrangements developed by BIS, the present chapter explores certain key elements in risk management system, such as generic categories of risks in banking organizations, the comprehensive risk management framework and governance structure, and specific risk management mechanisms. In this context, the chapter investigates varying risk management systems in banking institutions from different model countries and endeavors to reveal their dynamics with related legitimacy and paradigm discourses studied in previous chapters.
Weikang Zou

Chapter 10. Legal Duties in Chinese Bank Governance

Abstract
As the final piece of the puzzle, Chap. 10 explores legal duties of the bank in the context of corporate governance in banking organizations, which has been prioritized both by the banking industry and financial regulators across countries since and in the aftermath of the 2008 global financial crisis. Starting with discussion on legal duties in generic corporate governance, the chapter investigates specialized legal duties in the scenario of bank governance, which mainly embrace the compliance duty and fiduciary duty, with the former focusing on the duty to comply with the regulatory requirements and the latter comprising the duty of care, duty of loyalty, and duty of disclosure. On such basis, the present chapter continues to elaborate legal duties in Chinese bank governance, namely, the specific compliance duty and fiduciary duties in Chinese institutional settings. Representing, predominantly, the paradigm discourses of the diversified stakeholder theory and the legitimacy discourse of financial regulation, the compliance duty analyzes how Chinese banks comply with the laws and regulations in their business operation, anti-money laundering campaigns, and anti-corruption efforts. The fiduciary duties in Chinese banks, on the other hand, explore how the duty of care, the duty of loyalty, and the duty of disclosure are constituted by the regulatory discourses, which well resonate the paradigm discourses of the enhanced shareholder primacy.
Weikang Zou

Chapter 11. Book Conclusion

Abstract
In conclusion, this book has drawn on insights into the discursive institutionalist works and the varieties of capitalism literature in order to explore corporate governance of banking organizations in China. With its three-tier canvass of discourses, proceeding from legitimacy, paradigm, to frame, the book demonstrates that corporate governance in Chinese banks is symbiotically linked to the specific Chinese national configuration. At the legitimacy level, bank governance in China is found to be justified by the relationship between the bank and the economy, the impacts of paralleled powerful financial regulation and deregulative moves, and the increasing international influence. At the paradigm level, corporate governance in Chinese banks is illustrated to be shaped by a specific hybrid model with concerns for the shareholder primacy and broader stakeholder interest groups. At the level of the frame discourse, corporate governance in Chinese banking organizations is presented in the development of specific governance mechanism, typically represented by the organization and practice of the board of directors, regulation on executive pay, risk management, and legal duties.
Weikang Zou
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