HÀ NỘI – The State Securities Commission (SSC) will promote the standardisation of corporate governance for public companies this year.

There are also plans to issue the Code of Corporate Governance to improve the framework for the Vietnamese securities market in line with international practice.

Lê Công Điền, director of SSC’s Public Enterprises Supervisory Department, delivered the statement at the workshop on investor relations held in Hà Nội on Wednesday.

In 2018, the SSC is tasked with building the revised Securities Law, which should be submitted for the National Assembly’s review in the sixth meeting in October.

Điền said the institution and maintenance of good corporate governance practice is an important issue in the revised law. This is also a critical topic in economic action programmes, business communities in most countries in the world.

“Good corporate governance helps improve business performance and contributes to the prosperity of the economy in general,” Điền said.

According to Phan Đức Hiếu, deputy director of Central Institute for Economic Management under the Ministry of Planning and Investment, the average corporate governance quality of Vietnamese companies is much lower than the common ground in the region.

Việt Nam’s corporate governance scorecard of the six ASEAN countries was the lowest and lagged far behind the surrounding countries like Indonesia, Malaysia, the Philippines, Singapore and Thailand, Hiếu said investor relation is also a very new issue for listed companies here.

“There are very few companies aware of this problem, let a lone take actual action to implement this programme,” Hiếu said.

He said in the countries with high corporate governance quality, managers will apply the practice for the benefit of the company, even if the law does not require it.

According to Hiếu, as the corporate governance in Việt Nam is at a very early stage, the State invention is necessary to make sure companies comply with good practice.

In 2017, the Government issued Decree No 71/2017/NĐ-CP and the Ministry of Finance issued Circular No 95/2017 on corporate governance applicable to public companies. The law introduction has demonstrated the Government and market regulators’ willpower to develop good corporate governance practice, at the same time creating legal framework for improving the quality of goods on the stock market.

SSC and two stock exchanges have also made efforts to popularise and raise corporate awareness of enterprises, as well as encourage businesses to adopt good practice through training programmes and annual assessment on corporate governance of listed companies.

Hiếu also suggested the Government create the right environment and mechanism to develop the intermediaries or organisations that observe and evaluate companies, or carry out activities to protect the interests of shareholders. For example, in Malaysia, there are associations or companies established to protect shareholders.

Such organisations would put pressure on companies to adopt better practice and mechanism to protect shareholders’ interests, Hiếu said.

Nguyễn Anh Phong, deputy general director of the Hà Nội Stock Exchange, said good investor relations would bridge the gap between companies and their shareholders, at the same time supporting companies to raise capital from the securities market. – VNS