Phan Đức Hiếu, deputy general director of the Central Institute for Economic Management, speaks at the webinar on ‘Corporate Governance Code of Best Practices’. — VNS Photo

HCM CITY — Good corporate governance plays an important role in improving companies’ long-term performance, experts said.

Phạm Hồng Sơn, deputy chairman of the State Securities Commission of Việt Nam (SSC) told a webinar on ‘Corporate Governance Code of Best Practices on Tuesday that “Listed companies are improving their corporate governance.”

It would play an important role in helping them clearly distinguish between ownership, management and operating roles, he said.

In 2019 Việt Nam launched the Corporate Governance Code of Best Practices with a number of recommendations on best practices, primarily for public and listed companies.

Beside good practices, which have been incorporated in laws and regulations and adopted by companies, the code also encouraged companies to go beyond the minimum legal and regulatory requirements and move towards international best practices.

Phan Đức Hiếu, deputy general director of the Central Institute for Economic Management, said corporate governance at many companies is actually not very good.

For example, the 2020 Enterprise Law requires separating the positions of chairman and general director, but hundreds of businesses have still not complied.

Delegates speaking at the webinar agreed that companies with good corporate governance practices create confidence in investors and so have a competitive advantage in attracting capital.

Besides, high governance standards contribute to more effective boards and management, leading to improved decision-making, better operational efficiency and reduced risks, they said.

Đỗ Lê Hùng, an independent member of the Vinamilk board, said: “For sustainable development, there must be good corporate governance.

“The benefits of good corporate governance are very clear. The main driving force for the adoption of good corporate governance is not only the law or authorities, but also the perception of a company's leadership and the requirements of the market and investors.

“The implementation of good corporate governance is a long process of persuasion, testing, adaptation, evaluation, adjustment, and recognition. There is no one-size-fits-all formula. Therefore, each enterprise needs to choose the appropriate steps and ways to do it.”

Nguyễn Nguyệt Anh, corporate governance expert at the International Finance Corporation, said this code provides important guidance for Vietnamese companies seeking to improve their governance practices based on international standards

This, in turn, would help ensure Vietnamese companies are aligned with their ASEAN and international peers and remain competitive for long-term growth.

Trần Anh Đào, deputy general director of the Hồ Chí Minh Stock Exchange (HOSE) said the exchange encourages large listed companies to ensure good corporate governance to attract foreign investors.

New regulations related to corporate governance are included in HOSE’s guidelines sent to listed companies so that they could assess where they are and try to implement them, he added.

The webinar was organised by the State Securities Commission of Việt Nam, the IFC and the Hồ Chí Minh and Hà Nội stock exchanges. — VNS