The set of Principles of Best Corporate Governance for all public companies in Vietnam was publicised by the State Securities Commission of Vietnam (SSC) at the Ho Chi Minh Stock Exchange (HOSE) on August 13.
|Philippe Le Houérou - Chief Executive Officer of IFC speaks at the event (Source: VNA)
The principles aim to promote the capital market and the sustainable development of the economy.
The rules, which were developed with support from the International Finance Organisation (IFC) and the Swiss State Secretariat for Economic Affairs (SECO), make recommendations on best corporate governance practices for all Vietnamese public companies.
The set of 10 principles, with detailed recommendations on best principles, centre on addressing priority issues in corporate governance practices.
Notably, six out of them focus on operational functions of boards of directors – something many local firms need to improve.
The remaining four principles are related to corporate supervision, disclosure and transparency, shareholders' rights and relationships with stakeholders.
In addition to the above basic principles, the set also includes responsible business-related provisions, such as promoting gender diversity and encouraging a stronger focus on environmental and social issues in boards of directors.
Tran Van Dung, Chairman of the SSC, said issuing the principles is the latest effort to support all public companies and promote application of international corporate governance standards, thus helping improve the quality of listed companies.
It also marks a new step in perfecting the corporate governance ecosystem in Vietnam, he said.
According to Philippe Le Houérou - Chief Executive Officer of IFC, investors are generally more confident in companies that apply good corporate governance systems and in markets that are supported by strict mechanisms and supervision regulations.
The principles will help Vietnamese companies attract investors and help Vietnamese businesses improve their competitiveness and business performance, he added.