VN companies suffer from sub par directors
VN companies suffer from sub par directors
Directors have a very important role in working out and implementing companies' strategies, but in Viet Nam their competency remains questionable, experts have said.
Tran Thi Anh Dao, deputy CEO of the HCM Stock Exchange, told a seminar on Wednesday on enhancing competencies of company directors that the ASEAN Capital Markets Forum (ACMF) and the Asian Development Bank (ADB) have been issuing annually the ASEAN Corporate Governance Balanced Scorecard for listed companies since 2011.
The report, which ranks six ASEAN members — the others being Indonesia, Malaysia, the Philippines, Singapore, and Thailand — has Viet Nam last in the list.
The scorecard is worked out based on the rights of share holders, fair treatment to shareholders, information release and transparency, and the role of the board of directors, with the final one accounting for 40 per cent of the total marks.
Ha Thu Thanh, chairwoman of auditing firm Deloitte Vietnam — which together with HOSE organised the seminar – said the problems lie in the lack of competency and strategic thinking among directors, and underlined the need for training them.
She also highlighted the shortage of competent human resources for the job in Viet Nam.
Thanh, as well as Johan Nyvence, CEO of the HCM Securities Company, pointed to the fact that many family-owned and State-owned companies become joint stock but continue with incompetent directors.
Truong Gia Binh, chairman of the Corporation for Financing and Promoting Technology (FPT), said a board of directors is required to work out a sound development strategy and implement it.
Supervising implementation and other activities and tendering advice are its responsibilities, he said.
Speaking at the seminar, Dr Dona Hamlin, chairwoman of US-based consulting firm Hamlin Harkin, said governance should position boards to fulfill duties effectively and efficiently, ensure competent, committed directors are accountable to shareholders and provide transparent information to shareholders.
It should also, amongst other things provide a balance between itself and management in leadership, decision making, strategy, risk management and priorities for corporate performance, while maintaining constructive communication with shareholders and stakeholders.
Dao spoke about the need for regular competence improvement training for directors as already stipulated by law. She admitted that such training currently focuses on updates made to legal documents.
"Directors, on their part, often send their subordinates to these courses instead of attending them."
