-
 In
my opinion, corporate governance is very important in a market
economy where businesses are facing ever-increasing challenges
and competition. All types of businesses–whether state-owned or
private, large or small–need to pay attention to this issue.
Most joint-stock companies in Vietnam are small. Not only do
their management boards lack the knowledge and skills needed to
implement CG, but they are also unaware that CG promotes healthy
growth, enables companies to demonstrate accurate financial
positions, and fosters shareholder confidence.
We are a private joint-stock company established in November
2001. Fortunately, our founders have a great deal of management
experience and they recognize the importance of good corporate
governance. From the beginning, our goals have included
operating in a professional manner. Towards this end, we have
applied advanced international management methods and recruited
consultants to develop a long-term strategic plan. We also have
clear CG regulations concerning the split of functions between
Board of Management and company managers, the procurement and
tendering procedures, approval limits, etc.
Company disclosure and transparency is still quite a big issue
due to many constraints in Vietnam's legal framework. For
example, tax policies are not always clear and their
implementation is subject to the discretion of the tax
officials; this actually discourages companies from being
transparent. However, in our company, we report all this
information in a candid manner to our shareholders. We cannot
just blame the legal environment, since many foreign companies
operating in the same environment in Vietnam still maintain good
CG practices. I believe that transparent information disclosure
can contribute to the unity and consensus of company
shareholders.
There should be more opportunities for businesspeople to learn
about advanced CG models in the world and to update their
management knowledge and skills. Besides taking appropriate
training courses, Vietnamese companies can also recruit
consultants to provide advice tailored to their specific
circumstances. However, there are very few CG experts in Vietnam
and therefore international organizations' assistance in this
regard would be very valuable.
Mr. Tran Dang Tuan, Chairman of the Board of Management,
Hanoi Milk Joint Stock Company
-
 10/10
Textile Company is an equitized SOE and has had relatively good
growth trends. However, corporate governance in our company–as
in all other equitized SOEs–is still an issue.
First, in equitized companies, shareholders are normally not
aware of their rights and responsibilities as owners. The
responsibilities of running and developing the company fall
mainly on the shoulders of the Management; while limited
responsibilities are shared by the Board of Management, the
Supervisory Board and employees. Reasons for this include
inadequate knowledge and capacity and low awareness of the
rights and responsibilities associated with their shareholding
among those not responsible for daily management. Some Board of
Management members pay little attention to the company's
development strategy, while the Supervisory Board fails to
perform its roles of monitoring and protecting shareholders'
rights and ensuring financial transparency. Employee
shareholders only care about the dividend rate. Due to these
reasons, many equitized companies lack a clear development
strategy and it is possible for the company's managers to abuse
their position to advance their own interests.
Second, in equitized companies where the State remains a
shareholder, officials from different state agencies are
nominated to act as representatives of State shares and
participate in the companies' Board of Management or Supervisory
Board. These representatives cannot make quick decisions when
necessary; instead they have to go back and consult their
agencies, which can take quite a long time. In my opinion, there
should be a single state agency in charge of managing the
State's shares in equitized SOEs–this would be more efficient.
Corporate governance awareness among the general public and
among the business community in particular is still very low.
Efforts to improve public awareness about these issues,
therefore, are very important. When companies grow to a certain
size, CG is extremely important for their success.
Mr. Duong Van Binh, Director,
10/10 Textile Joint Stock Company
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