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IFC arm eyes better corporate governance
The International Finance Corporation unveiled the Corporate Governance Manual and Corporate Governance Scorecard for Viet Nam to improve governance standards and practices in the country on Dec. 15.
A decade after the stock market opened, there are 500 listed companies, a million retail trading accounts, 105 securities and 46 fund management companies, while the market capitalisation is 40 per cent of the GDP, which was worth US$93.5 billion last year.
"However, it is necessary to increase awareness of corporate governance because most of these listed companies inherited outdated State management," Vu Thi Kim Lien, Vice Chairwoman of the State Securities Commission of Viet Nam (SSC), said.
The Corporate Governance Manual closely examines all applicable Vietnamese laws and regulations and relevant international standards and practices and provides recommendations to shareholders, corporations, and the Government for implementing and monitoring good governance standards.
Published in co-operation with the SSC, it comes at a time when Viet Nam's business community can benefit from comprehensive guidelines for shareholder rights, meetings, voting, and a more consistent regulatory framework.
"We hope the manual will be a useful tool for public holding companies, especially listed companies, providing them the knowledge to enhance their professionalism and value in the securities market," Lien added.
The Corporate Governance Scorecard for Viet Nam – done in co-operation with the SSC and the Global Corporate Governance Forum and support from the Japanese Government – is a review of governance at the 100 largest companies listed in Ha Noi and HCM City as of January 1, 2009.
It seeks to develop a benchmark for corporate governance by exploring compliance with laws and regulations and globally recognized practices.
"Vietnamese companies with good corporate governance are better positioned to attract external financing, increase profitability, and hire and maintain a quality workforce," Simon Andrews, the IFC's regional manager for Viet Nam, Cambodia, Laos, and Thailand, said.
"We expect that the manual and scorecard will help both the public and private sectors adopt transparent, timely, and standardised practices that will enable them to integrate into an increasingly selective and competitive global market," he added.
Bui Hoang Hai, Deputy Director of the SSC's Securities Issuing Department, said: "We will amend the law to make it mandatory for company directors to attend corporate-governance training courses.
The two were produced as part of the IFC's Viet Nam Corporate Governance programme, which was implemented in October 2008 in partnership with Finland, Ireland, the Netherlands, New Zealand, and Switzerland.
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