Enterprises are still confused between corporate governance with normal operation

What do you think about the CG in Vietnamese enterprises at present time?

The improvement of corporate governance will give enterprises many opportunities and benefits, such as: Increasing accessibility to capital markets; Improving transparency in management and operation; Being an effective tool to detect and prevent financial fraud and corruption; Building trust of businesses for investors; Helping to operate the enterprises objectively and flexibly, and helping enterprises make appropriate business decisions.

However, the awareness of enterprises about the role and position of CG is not good, compared with other countries in the region, Vietnamese enterprises are medium level and have not given trust and not brought good effect in business. Vietnamese enterprises are still confused between corporate governance and the normal operation. Therefore, they have not fully applied good practices as well as corporate governance principles to benefit enterprises.

There are many indicators forming up good practices on CG. For example, in terms of minority shareholder protection, we had good and sufficient regulations, but there are a number of principle groups in practice, of which five large principle groups implemented by the OECD countries have not been improved compared to other countries in the world.

What is difference in CG between State-owned enterprises and private enterprises, Madam?

As for me, any enterprises which l perform the CG well, their business operations will be improved. Therefore, the performance of CG of the state-owned enterprises is as normal as private enterprises. However, the characteristics of state-owned enterprises are the role of the governing agencies for the members' councils and other shareholders, so that these enterprises should have more specific regulations from the State for problems of CG.

What are solutions for above problems, Madam?

Certain principles and rules are built on the basis of good practices on CG. When implementing these principles, enterprises will have to change their governance and change the relationship in the operation. For changes, enterprises need to learn and study the essential nature of the problem.

In fact, the application of the principles and regulations of CG is not difficult, it is important that enterprises are aware or not. In my opinion, Vietnam enterprises have intended to start to change their management model, many enterprises did not establish private companies or business households, but established companies limited and joint stock companies. For a joint stock company, the role and governance of the board of members are important, which depends on the awareness of the board of members. Currently, the legal corridor has specific regulations, but how the enterprise apply depends on the level of propaganda, as well as the skills and capacity of the board of members when joining the management board of enterprises, joint stock companies and listed companies.

Therefore, VCCI has recommended a training program for its members to understand their role and position and apply good principles on corporate governance in the enterprises through the establishment of a Board Member Institute. This is a model to support and promote the corporate governance, which is quite popular in the world, to assist board members in various ways; thereby, developing regulations and rules to operate enterprises and meeting the set requirements of corporate governance.

According to the international practices, the Board Member Institute is a relatively independent organization and is built on the basis of members as enterprises which have the demand for improving their corporate governance, this will be an address to train independent board members whom Vietnamese enterprises are currently lacking

Thank you,