In 1999, a remarkable adoption on the law of enterprises by the National Assembly of Vietnam completely changed the paradigm where the legislative framework was introduced for domestic corporate governance. This radical changed helped in the growth of the private sector and thereby the increase in the employment opportunity. In Asia and also globally, Vietnam has been considered as a competitive source of profitable revenue generation resulted from the diverse development of the domestic production and private enterprise being increased.
The major four players in promotion of Corporate Governance are: –
- Capital Markets: – Ho Chi Minh Stock exchange (HOSE) and the Hanoi Stock Exchange (HNX) are the two stock exchanges in Vietnam where the capitalization market for HOSE is US$53.8 billion and US$6.9 billion for HNX. The data has been recorded for the year 2016. 7,000 firms are listed in the two-stock exchange with most being SOEs. A total of 26,785 enterprises are registered with new establishment with a capital of around US$11.98 million scored in the first quarter of 2018. The growth of the enterprise was recorded a rise of 1.2 percent whereas the registered capital growth by 2.7 percent.
- State Securities Commission (SSC): — It is a governmental agency in charge of organize and regulating the security operations in the market with an objective of maintaining an orderly, safe, transparent, equitable and efficient securities in the market with an importance of shareholder rights to be protected. It serves as a non-bank listed firm with an enforcement power of suspending or removing licenses. The SSC hold the ASEAN Green Bond Standards Roundtable Meeting with an International Finance Corporation jointly in March 2018 to promote sustainable and green capital market.
- State Bank of Vietnam: — It is a government agency for banks and financial institution and manages the monetary and foreign exchange at a state level so that the Vietnamese currency can be stabilized and public services can be provided for socialist orientation. The aim for the capital market development board is researching and designing securities projects so that the requirements can be prepared for the securities market.
- SOEs and SCIC: — In the nation’s economy, SOEs got a dominant position and over the two decades, many joint stock firms are a result of the transformation of many SOEs where the state holds the majority interest. The function of SOEs in Vietnam is ownership rights exercising and regulations where finance and favourable government conditions are easily accessible with a pressure limited to develop competitiveness and thereby transparency can be enhanced. SCIC (The State Capital Investment Corporation) was for assessing governance, promoting SOE restructures and the utilization of the state capital can be increased where the portfolio for the SCIC’s consist of 133 companies with a state capital of around US $0.82 billion. The ownership representation rights are protected by the SCIC to enhance the efficiency of corporate governance and ensure the management practices.
Sources:- Business sustainability in Asia.