Industrial and Commercial Bank of China: The governance model

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.