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Enhancing corporate governance to upgrade the stock market
The year 2024 will see great strides made in upgrading the Vietnamese stock market, a conference has been told.
Vũ Thị Chân Phương, Chairwoman of the State Securities Commission, speaks at the conference. — Photo courtesy of SSC
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But to achieve this goal, enterprises must fully comply with the responsibilities and obligations of their Board of Directors according to corporate and securities law.
The Government and Ministry of Finance (MoF) are particularly focused on improving corporate governance quality linked with Environmental, Social, and Governance (ESG) standards for listed companies. This is evidenced by practical actions from the Việt Nam Institute of Directors in promoting and implementing corporate governance standards.
At the “Enhancing Corporate Governance Capacity for Listed Companies” conference, Vũ Thị Chân Phương, Chairwoman of the State Securities Commission (SSC), said: “Over 25 years of development, the Vietnamese stock market has become a crucial channel for medium and long-term capital for the economy.”
From just three listed companies when it began in 2000, the stock market has grown, now boasting almost 1,800 with a market capitalisation exceeding VNĐ7,066 trillion, an increase of 19 per cent compared to the end of 2023, equivalent to 69 per cent of GDP.
The average daily trading value on the Hồ Chí Minh Stock Exchange alone is around US$1 billion, and the number of investor accounts has reached more than 7 million, about 7.5 per cent of the population. Many companies have successfully raised capital in the stock market.
In the future, the stock market will continue to develop, aligning with international standards and practices, aiming for an upgrade from a frontier to an emerging market. Therefore, improving corporate governance is becoming increasingly essential.
The process enterprises must address is split into four factors: enhancing transparency and financial reporting, raising governance standards, attracting investment and improving the company's image and sustainable development with social responsibility.
Phương said: “ESG requirements will become more critical as the stock market is upgraded. Companies must focus on environmental, social, and governance issues to meet international standards and the expectations of global investors.”
She said enterprises must fully comply with the responsibilities and obligations of the Board of Directors as per corporate and securities law. Currently, public company governance is still limited, and finding suitable independent Board members is challenging for enterprises.
“With a strong determination to improve corporate governance, attract foreign investment to the stock market, the State Securities Commission will advise the government and the MoF to develop the best legal frameworks, facilitating listed companies and always accompanying enterprises in corporate governance issues, ready to address any concerns,” Phương added.
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