A set of indicators to measure corporate governance criteria is coming soon.

In the market trend, international investment funds and foreign investors are focusing and shifting sustainable investments to businesses committed to good corporate governance and transparency.

The Importance of Improving Corporate Governance

Corporate governance (CG) is considered a very important channel to bring capital into the market and into enterprises. This is a measure of competitiveness, a foundation for enhancing transparency and accountability of enterprises when implementing sustainable development strategies. Improving the CG level of each enterprise and of the Vietnamese stock market in the region is also being prioritized by enterprises in their development strategies in 2025 and the coming years.

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, 2024 in Ho Chi Minh City.

This is the most prestigious professional event in Vietnam 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).

Sharing about the importance of corporate governance, Ms. Ha Thu Thanh, Chairwoman of the Board of Directors of Vietnam Institute of Directors (VIOD) said that investing in corporate governance has many large and positive impacts on businesses.

Ms. Ha Thu Thanh, Chairwoman of the Board of Directors of Vietnam Institute of Directors (VIOD).

Specifically, investing in corporate governance will enhance the soft competitiveness of enterprises, where investors and the public can look to see the capacity of enterprises. At the same time, the comprehensive benefits of enterprises are increased and go beyond compliance. Enterprises not only need to do the right thing, do enough, but also do better. 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 assessed that 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 (S factor). But social implementation has a higher level than social impact. This is measured by the G factor (both Governance and Growth).

Enterprises need to identify that ESG is only a part of sustainable development. Enterprises need to consider corporate governance as an important part, a core element of ESG. When ESG is combined with corporate governance culture, sustainable development can be created.

VNCG50 Scorecard will be announced

According to Mr. Phan Le Thanh Long, General Director of the Vietnam Institute of Directors (VIOD), in terms of corporate governance, at the regional level, Vietnam is participating in 7 assessments of the ASEAN Corporate Governance Scorecard (ACGS). Vietnam has continuously maintained a low ranking in all 7 assessments and its average CG score is always below average. In 2024, Vietnam will only have 69 enterprises selected due to the requirement to disclose information in English and the quality of reports.

Currently, Vietnam's corporate governance level is at the lowest level among the 6 ASEAN countries and lower than the average level in the Southeast Asia Corporate Governance Scorecard (ACGS). Therefore, the requirement to improve the quality and level of corporate governance for Vietnam should be truly considered as an important strategic goal and should be given top priority.

At the upcoming AF7 Forum, VIOD will also announce the VNCG50 initiative for the first time. As a professional partner with many years of experience in assessing corporate governance for both the Vietnam Listed Company Awards (VLCA) and ACGS, VIOD has proposed the VNCG50 index and is supported by the State Securities Commission and the Vietnam Stock Exchange (VNX). This scorecard is built on the evaluation indexes of ACGS according to good practices, and is based on the reality of corporate governance in Vietnam. VNCG50 is assessed by a Council chaired by VNX, including members who are experts from the Ho Chi Minh City Stock Exchange (HoSE), Hanoi Stock Exchange (HNX), fund representatives, securities companies and independent experts.

The scorecard initiative introduced at the upcoming annual 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 to 2030, narrow the gap in corporate governance practices between Vietnam and Southeast Asia, raise the ACGS score to the average level, thereby improving the quality of goods on the market, increasing transparency and attracting investors.

Mr. Phan Le Thanh Long, General Director of Vietnam Institute of Directors (VIOD).

Mr. Phan Le Thanh Long revealed that in 2024, VNCG50 will be announced as an initiative and will be upgraded to the VNCG50 index in 2025 - 2026. Enterprises on this list will have great benefits when becoming a reference point to attract investment. According to the process, based on the VNX Allshare basket, enterprises will be reviewed for their practices in disclosing information on governance and Annual Reports in English, considered for participation in the ACGS assessment in the last 3 years and from there nominate 64 enterprises to the Evaluation Council for selection. After the assessment, 50 selected enterprises will be included in the VNCG50 list.

The General Director of VIOD said that 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 not only in attracting investment capital from international investment funds, but also in creating a sustainable development foundation for the Vietnamese stock market itself, especially in the context of Vietnam's efforts to upgrade from a frontier market to an emerging market.

Source: https://baodautu.vn/sap-co-bo-chi-so-do-luong-tieu-chi-quan-tri-cong-ty-d231288.html