Econ
Improved corporate governance to develop securities market
The State Securities Commission (SSC) will enhance the quality of enterprises on the stock market through standardizing regulations on corporate governance, SSC officials said.
During a recent corporate governance workshop to introduce international practices on investor relations, Le Cong Dien, director of SSC’s Public Enterprises Supervisory Department, said that the SSC also plans to issue the Code of Corporate Governance to streamline the legal framework for the Vietnamese securities market in line with international practice.
The SSC is also building up the revised Securities Law, which should be submitted for the National Assembly’s review in the sixth meeting in October.
According to Dien, the institution and maintenance of good corporate governance practice is an important issue in the revised law. This is also a critical topic in economic action programs, business communities in most countries in the world.
Good corporate governance helps improve business performance and contributes to the prosperity of the economy in general, he said.
Phan Duc Hieu, deputy director of Central Institute for Economic Management under the Ministry of Planning and Investment, said that the average corporate governance quality of Vietnamese companies is much lower than the common ground in the region.
Vietnam’s corporate governance scorecard of the six ASEAN countries was the lowest and lagged far behind the surrounding countries like Indonesia, Malaysia, the Philippines, Singapore and Thailand, Hieu said investor relation is also a very new issue for listed companies here.
There are very few companies aware of this problem, let a lone take actual action to implement this program, Hieu said.
He said in the countries with high corporate governance quality, managers will apply the practice for the benefit of the company, even if the law does not require it.
According to Hieu, as the corporate governance in Vietnam is at a very early stage, the State invention is necessary to make sure companies comply with good practice.
Hieu also suggested the government create the right environment and mechanism to develop the intermediaries or organizations that observe and evaluate companies, or carry out activities to protect the interests of shareholders. For example, in Malaysia, there are associations or companies established to protect shareholders.
Such organizations would put pressure on companies to adopt better practice and mechanism to protect shareholders’ interests, Hieu said.
Nguyen Anh Phong, deputy general director of the Hanoi Stock Exchange, said good investor relations would bridge the gap between companies and their shareholders, at the same time supporting companies to raise capital from the securities market.
SSC, Hanoi and Ho Chi Minh stock exchanges have so far made efforts to popularize and raise corporate awareness of enterprises, as well as encourage businesses to adopt good practice through training programs and annual assessment on corporate governance of listed companies.
In 2017, the Government issued Decree No 71/2017/ND-CP and the Ministry of Finance issued Circular No 95/2017 on corporate governance guidance for public interest companies (PICs). The law introduction has demonstrated the Government and market regulators’ willpower to develop good corporate governance practice, at the same time creating legal framework for improving the quality of goods on the stock market.
According to the decree, the corporate governance charter now must be approved by the shareholders through the annual general meeting, instead of the Board of Directors as previously. They are also given the rights of access to further information on actual operations and performance of the company.
It also requires PICs to disclose its corporate governance model within 24 hours of changes, and publicize its director and other managers’ incomes.
The SSC is also building up the revised Securities Law
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According to Dien, the institution and maintenance of good corporate governance practice is an important issue in the revised law. This is also a critical topic in economic action programs, business communities in most countries in the world.
Good corporate governance helps improve business performance and contributes to the prosperity of the economy in general, he said.
Phan Duc Hieu, deputy director of Central Institute for Economic Management under the Ministry of Planning and Investment, said that the average corporate governance quality of Vietnamese companies is much lower than the common ground in the region.
Vietnam’s corporate governance scorecard of the six ASEAN countries was the lowest and lagged far behind the surrounding countries like Indonesia, Malaysia, the Philippines, Singapore and Thailand, Hieu said investor relation is also a very new issue for listed companies here.
There are very few companies aware of this problem, let a lone take actual action to implement this program, Hieu said.
He said in the countries with high corporate governance quality, managers will apply the practice for the benefit of the company, even if the law does not require it.
According to Hieu, as the corporate governance in Vietnam is at a very early stage, the State invention is necessary to make sure companies comply with good practice.
Hieu also suggested the government create the right environment and mechanism to develop the intermediaries or organizations that observe and evaluate companies, or carry out activities to protect the interests of shareholders. For example, in Malaysia, there are associations or companies established to protect shareholders.
Such organizations would put pressure on companies to adopt better practice and mechanism to protect shareholders’ interests, Hieu said.
Nguyen Anh Phong, deputy general director of the Hanoi Stock Exchange, said good investor relations would bridge the gap between companies and their shareholders, at the same time supporting companies to raise capital from the securities market.
SSC, Hanoi and Ho Chi Minh stock exchanges have so far made efforts to popularize and raise corporate awareness of enterprises, as well as encourage businesses to adopt good practice through training programs and annual assessment on corporate governance of listed companies.
In 2017, the Government issued Decree No 71/2017/ND-CP and the Ministry of Finance issued Circular No 95/2017 on corporate governance guidance for public interest companies (PICs). The law introduction has demonstrated the Government and market regulators’ willpower to develop good corporate governance practice, at the same time creating legal framework for improving the quality of goods on the stock market.
According to the decree, the corporate governance charter now must be approved by the shareholders through the annual general meeting, instead of the Board of Directors as previously. They are also given the rights of access to further information on actual operations and performance of the company.
It also requires PICs to disclose its corporate governance model within 24 hours of changes, and publicize its director and other managers’ incomes.
