Improving the management capacity of Vietnamese enterprises

NDO - On November 29, in Hanoi, Dau Tu Newspaper organized a press conference before the 7th Annual Forum on Corporate Governance. Accordingly, within the framework of the Forum, the VNCG50 scorecard initiative is expected to be launched with the aim of helping Vietnamese listed companies improve their corporate governance practices in line with the stock market development strategy to 2030 as well as narrowing the gap in corporate governance practices between Vietnam and the region.

According to the Organizing Committee, in order to promote the Vietnamese financial and securities market to become more transparent and attractive to domestic and foreign investors, especially in the context that the Vietnamese securities market is likely to be upgraded in 2025, the 7th Annual Forum on Corporate Governance (AF7) with the theme "Investing in corporate governance: A strategy to attract responsible investors in the trend of market internationalization" will be held on December 5 in Ho Chi Minh City.

This is a prestigious professional event on corporate governance integrated with ESG and sustainable development organized by the Vietnam Institute of Directors (VIOD) with the support of the International Finance Corporation (IFC), the Swiss State Secretariat for Economic Affairs (SECO) and the State Securities Commission, with professional support from the Ho Chi Minh City Stock Exchange (HoSE) and Hanoi Stock Exchange (HNX).

Effective governance linked to ESG

Sharing about the importance of corporate governance, Ms. Ha Thu Thanh, Chairwoman of VIOD's Board of Directors, said that investing in corporate governance has many large and positive impacts on businesses. Specifically, investing in governance will enhance the soft competitiveness of businesses, where investors and the public can look to see the capacity of the business. At the same time, the comprehensive benefits of the business are increased and go beyond compliance. Not only investors, market management agencies but also customer partners, rating organizations, social communities and employees are interested in companies with good governance.

Ms. Ha Thu Thanh, Chairwoman of the Board of Directors of Vietnam Institute of Directors (VIOD) shared about the importance of corporate governance.

The year 2024 marks an important turning point in improving the quality of corporate governance in Vietnam. As corporate governance requirements increase, investing in effective governance associated with ESG is a choice and becomes an important need for businesses, especially listed businesses and public companies. Currently, investors, especially international investment funds, are focusing and shifting sustainable investments to businesses that implement corporate governance associated with measuring the level of impact on the environment and society. Corporate governance is considered a very important channel to bring capital into the market and into businesses.

“In Vietnam, businesses are implementing ESG, but only at the E factor (environment) to respond to comply with requirements, partners, markets in the direction of reducing negative impacts, reducing greenhouse gas emissions... and spending budget on social activities (factor S). But social implementation has a higher level than social impact. This is measured by the G factor (both Governance and Growth). Businesses need to identify that ESG is only a part of sustainable development. Businesses need to consider corporate governance as an important part, a core element of ESG. When ESG is combined with corporate governance culture, it can create sustainable development”, Ms. Ha Thu Thanh assessed.

Mr. Phan Le Thanh Long, General Director of Vietnam Institute of Directors (VIOD) shared about the VNCG50 scorecard initiative.

Meanwhile, according to VIOD General Director Phan Le Thanh Long, in terms of corporate governance, at the regional level, Vietnam is participating in 7 ASEAN Corporate Governance Scorecard (ACGS) assessments. Vietnam has consistently ranked low in all 7 assessments and its average corporate governance score is always below average. In 2024, only 69 enterprises in Vietnam will be selected due to the requirement to disclose information in English and the quality of reports. Therefore, the requirement to improve the quality and level of corporate governance for Vietnam needs to be truly considered as an important strategic goal and should be given top priority.

VNCG50 Initiative

At the upcoming AF7 Forum, VIOD will also announce the VNCG50 initiative for the first time. This is a scorecard built on the ACGS assessment indicators according to good practices, and also based on corporate governance practices in Vietnam. VNCG50 is evaluated by a Council chaired by VNX, including members who are experts from HoSE, HNX, fund representatives, securities companies and independent experts.

Scene of the press conference.

The scorecard initiative introduced at the forum is a set of criteria for assessing corporate governance practices for listed companies, mainly based on good practices in the region, thereby helping to nominate 50 pioneering Vietnamese companies and commit to ensuring good corporate governance practices.

The VNCG50 scorecard aims to help Vietnamese listed companies improve their corporate governance practices in line with the stock market development strategy until 2030, narrowing the gap in corporate governance practices between Vietnam and Southeast Asia, and raising the ACGS score to the average level. Thereby improving the quality of goods on the market, increasing transparency and attracting investors.

“The announcement of VNCG50 aims to not only upgrade the Vietnamese stock market, but also successfully attract new, quality capital flows into the market. Improving corporate governance plays an important role in attracting investment capital from international investment funds, creating a foundation for sustainable development for the Vietnamese stock market itself, especially in the context of Vietnam's efforts to upgrade from a frontier market to an emerging market,” added the VIOD General Director.

Source: https://nhandan.vn/nang-cao-nang-luc-quan-tri-cua-doanh-nghiep-viet-nam-post847681.html