Case Study

Industrial and Commercial Bank of China: The governance model

14 pages
November 2012
Reference: IMD-1-0335

This is a short version of case IMD-1-0327 Industrial and Commercial Bank of China: Governance Lessons from East to West. For more details, please refer to the full-length case. In June 1999, ICBC – the largest commercial bank in China – was technically bankrupt, with a nonperforming loan ratio of 47.59%. But, thanks to the united efforts of the government, the management team and its employees, the bank rose from the ashes through a transformation in its governance structure. After the third quarter of 2007, ICBC had continued to be ranked as the largest bank in the world by market capitalization, customers’ deposits and profitability. This case describes ICBC’s governance model, including the inner workings of the shareholders, the board of directors, the board of supervisors, the senior management team, the communist party committee, outside monitoring and discipline. The discussions are relevant to Western companies in terms of understanding the corporate governance structure adopted by large Chinese enterprises. The success of the bank and its unique governance structure bring much inspiration from East to West.

Learning Objective

At executive and board level, participants can focus on the banking governance structure and the pros and cons of the ICBC system. By the end of the class discussion, participants should be able to grasp the problems arising from conflicts of interest among shareholders, directors, supervisors, the management team, the communist party and regulators. They should also understand the inner workings of these stakeholders, in particular the incentives of each stakeholder group which differ greatly from those in the West. The discussions offer participants the opportunity to reflect on Western governance practices and borrow elements that could be useful.

Banking, Banking Reform, Corporate Governance, Board Structure, Communist Party
Field Research
© 2012
Available Languages
Related material
Teaching note
Case clearing houses
IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]


Research Information & Knowledge Hub for additional information on IMD publications

Looking for something specific?
IMD's faculty and research teams publish articles, case studies, books and reports on a wide range of topics