2013年-世界发展银行全球_Corporate_Governance_Country_Assessment___Vietnam_52页_2mb

Summary of the 2013 Vietnam Corporate Governance Country Assessment (ROSC)

Core Content

This report is a Corporate Governance Country Assessment (ROSC) conducted by the World Bank and the International Finance Corporation (IFC) in August 2013. It evaluates Vietnam's corporate governance framework, legal regulations, and practices in relation to the OECD Principles of Corporate Governance, and provides policy recommendations to improve governance in the country.

The assessment is an update of the 2006 Corporate Governance ROSC for Vietnam and highlights recent progress in corporate governance regulation, challenges in governance practices, and key areas for reform. It is based on a Detailed Country Assessment (DCA) and draws on various legal, regulatory, and market sources.

Main Objectives

• To identify weaknesses in corporate governance that may contribute to economic and financial vulnerability.
• To benchmark Vietnam’s legal and regulatory framework against international standards.
• To provide a policy benchmark for investors and stakeholders.
• To support reforms in governance, especially in state-owned enterprises (SOEs) and listed companies.

Key Findings

1. Recent Improvements

• Capital markets have grown significantly since 2006, with over 600 companies listed on the Ho Chi Minh Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX).
• The State Securities Commission (SSC) has issued and revised Corporate Governance Regulations (CG Regulations) and a Model Charter, incorporating many good practices for listed and public companies.
• The Law on Enterprises (LoE), Law on Credit Institutions (LCI), and Law on Independent Audit (LoIA) have been introduced or revised to improve the governance environment.
• Shareholder rights have improved, including the right to cumulative voting, pre-emptive rights, and the right to call for an extraordinary meeting.
• Disclosure requirements have been strengthened, especially in relation to related party transactions (RPTs) and board transparency.
• Auditor independence is required by law, with clear certification and licensing rules, and mandatory 40 hours of continuous education per year for auditors by the Vietnam Association of Certified Public Accountants (VACPA).

2. Key Challenges

• State-owned enterprises (SOEs) still dominate the market, with governance practices often lacking transparency and professionalism.
• Shareholder redress mechanisms are limited, with minority shareholders facing significant barriers to influence and protection.
• Disclosure of indirect control and beneficial ownership is inadequate, and RPT rules are weak due to narrow definitions and poor enforcement.
• Board professionalism is lacking in many companies, with few independent members, limited training, and inadequate internal controls.
• Regulatory capacity is strained, especially due to the rapid market expansion and limited independence and resources of the SSC.
• Accounting standards are outdated and not aligned with International Financial Reporting Standards (IFRS).
• Market participation is limited, with low market cap to GDP ratio (23.2%) and low turnover ratio (13.2%).

Key Recommendations

• Develop an action plan to address core governance failings of SOEs, including replacing the state economic groups (SEGs) with a more accountable state ownership model.
• Ensure legal consistency and clarity for market participants.
• Enhance cooperation between regulators and strengthen the powers, resources, and independence of the SSC.
• Improve minority shareholder protection by increasing redress mechanisms, strengthening RPT and control change rules, and improving shareholder meeting processes.
• Establish board professionalism and effectiveness, including through the creation of an Institute of Directors (IoD) or equivalent organization.
• Increase transparency by enhancing auditor independence, improving disclosure of ownership and control, and converging accounting standards with IFRS.

Legal and Institutional Framework

• Vietnam operates under a civil law system with some common law influence.
• The Law on Enterprises (LoE) governs both public and private companies, but there is no single national authority for implementation.
• The SSC is the primary regulator of capital markets and listed companies, with oversight of HOSE and HNX.
• The State Bank of Vietnam (SBV) regulates and owns state-owned commercial banks, and the Ministry of Finance (MoF) oversees accounting and auditing.
• Vietnamese Accounting Standards (VAS) and Vietnamese Standards on Auditing (VSA) are based on older international standards.
• There is no Institute of Directors (IoD) in Vietnam, which limits the development of board best practices.

Ownership and Market Characteristics

• The majority of listed companies have state ownership or significant blockholders, with over 350 listed companies reporting some state ownership.
• State ownership ranges from 1-5% to 75-95%, with 244 companies reporting 25% or more state ownership.
• Private ownership is recent, with family-controlled groups beginning to emerge.
• Foreign investors are increasingly involved, especially in HOSE companies, with 15% of trading volume attributed to foreign ownership.
• Vietnam's market cap to GDP ratio is relatively small compared to regional peers, and market turnover remains low.

Conclusion

Vietnam has made substantial progress in corporate governance since 2006, particularly in shareholder rights, disclosure, and board oversight. However, governance in SOEs remains weak, and regulatory capacity is insufficient to address the complex and evolving market. Continued reform is necessary to professionalize boards, protect minority shareholders, and align governance practices with international standards.