In this paper we investigate the relation between corporate governance mechanisms and performance of financial holding companies (FHCs). We find that irrecoverable loans will affect the accuracy of FHCs¡¦ performance. So we remove the factor of bad debts and use this new performance proxy. In addition, we investigate the difference of corporate governance mechanisms between the FHCs that have subsequently merged other banking firms and those that haven¡¦t. The results are as following. (1)The financial performance of FHCs and corporate governance mechanisms We find that the coefficients for the institutional investor ownership and board size are negative and statistically significant. This result is consistent with Pound¡¦s (1999) strategic alignment hypothesis and with Jensen (1993), Lipton and Lorsch (1992). However, the coefficients for the managerial, governmental ownership, and supervisor size are not statistically significant. When we investigate the 7 better FHCs as another samples. The coefficient for the governmental ownership is negative and statistically significant. We believe that the governmental ownership will make the firms conservative and is not good for company. (2)The subsequent mergers and corporate governance mechanisms The FHCs that have subsequently merged other banking firms have higher level of the managerial and institutional investor ownership, but less number of board size and supervisor size than those that haven¡¦t. But there is no difference in the governmental ownership. The findings are consistent with Amihud and Lev (1981) and Roll (1986). They believed that mangers will make money or non-money profit during merging and institutional investors will cooperate with managers to avoid the conflict of interest between them.