Quản trị công ty đại chúng theo pháp luật việt nam hiện nay tt tiếng anh

By examining comprehensively “The governance of public companies under the Vietnamese law nowadays” will contribute to further interpret scientifically public company governance and pro

VIETNAM ACADEMY OF SOCIAL SCIENCES

GRADUATE ACADEMY OF SOCIAL SCIENCES

L

TRAN LUONG DUC

THE GOVERNANCE OF PUBLIC COMPANIES UNDER THE VIETNAMESE LAW NOWADAYS

The dissertation completed at Graduate Academy of Social Sciences, Vietnam Academy of Social Sciences

Supervisors: 1 Assoc Prof Dr Nguyen Nhu Phat

2 Assoc Prof Dr Duong Duc Chinh

Reviewer 1: Assoc Prof Dr Tang Van Nghia

Reviewer 2: Assoc Prof Dr Bui Thi Huyen

Reviewer 3: Assoc Prof Dr Duong Dang Hue

The dissertation will be defended at Graduate Academy Level Council of dissertation assessment at Graduate Academy of Social Sciences, Vietnam Academy of Social Sciences, 477 Nguyen Trai, Thanh Xuan, Hanoi

Time: ………… date ……… month …… …year 2019

The dissertation may be found at:

- Vietnam National Library;

- Graduate Academy of Social SciencesLibrary

INTRODUCTION

1 The necessity of the research topic

In Vietnam, the legal framework for public company governance is basically mentioned in the 2005 Law on Enterprises, the 2014 Law on Enterprises, the 2006 Law on Securities, the Law on amending and supplementing a number of Articles of the 2012 Law on Securities, Decrees guiding the implementation of the Law on enterprises, the Law on securities, and documents guiding the implementation, have shown quite fully the need to adjust the law in this field

Actually, however, the current legal framework for public company governance in our country has still many gaps, not really protecting the legitimate rights and interests of shareholders and the consequence is that a deep division among groups of shareholders in the company as a basis for large-scale mergers and acquisitions To overcome these limitations, it is necessary to improve the efficiency of law enforcement of public company governance, strengthen the role and capacity of securities market management agencies; continue to improve legal regulations on corporate governance By examining comprehensively “The governance of public companies under the

Vietnamese law nowadays” will contribute to further interpret scientifically

public company governance and propose some solutions to improve the provisions of the law on corporate governance in general and public company

governance in particular in Vietnam

2 Research purpose and tasks

2.1 Research purpose

The research purpose of the dissertation is based on the results of interpretation of theoretical and practical basis of legal regulations on public company governance in our country, and on the basis of comparison and reference to mechanism of public company governance under the law of some countries around the world and general practices so as to make recommendations to improve and enhance the effectiveness of the law on public company governance in Vietnam today

2.2 Research tasks

The dissertation seeks to clarify the following tasks:

- Analyzing concepts, characteristics and contents of corporate governance

in general and public companies in particular Analyzing and assessing the

need to adjust by the law of corporate governance relations, the legal regime for public company governance in the legal documents, priciples of management, internal organizational structure, advantages and disadvantages

of public companies, and referring and analyzing the legal structure of public company governance

- On the basis of comparison with regulations on public company governance under the international practices and laws, the study analyzes and clarifies characteristics of public company governance in Vietnam

- Analyzing and evaluating the legal framework on public company governance in Vietnam which prescribed by the Law on Enterprises, the Law

on Securities and other relevant legal documents; the reality of application and enforcement of these laws by public companies and relevant agencies and organizations; and then identifying the strengths and weaknesses of these laws

- Clarifying the necessity and objectivity of improving the law on public company governance, and proposing recommendations and solutions to improve the efficiency of public company governance under the Vietnamese law

3 Research subjects and scope

3.1 Research subjects

The research subjects of the dissertation are opinions, jurisprudence, models of corporate governance in general and public company governance in particular; Vietnamese legal documents on public company governance; OECD’s governance principles, foreign laws on public company governance; practices of developing, applying and enforcing the law on public company governance in Vietnam

3.2 Research scope

- Regarding contents

The dissertation just analyzes and evaluates the provisions of the law on public company governance which stipulated by the Law on Enterprises, the Law on Securities and relevant legal documents The study analyzes the provisions of the law on shareholder’s rights and protection of shareholder’s rights; management apparatus and power division in the company; the law of preventing and resolving interest conflicts, self-interested transactions; transparency and information disclosure; inspection, supervision and handling

- Spatially and time

+ Spatially: the dissertation just examines theoretical and practical issues of the law on public company governance in Vietnam, in which, having comparisons, experiences of some countries on building and enforcing law on public company governance

+ Regarding time: the dissertation just examines issues since 2006 (since the 2005 Law on Enterprises took effect)

4 Methodology and research methods

4.1 Methodology

In order to clarify the research issues, the dissertation based on methodology of Marxism-Leninism on dialectical and historical materialism, the State and the Party’s points of view on economic development in the innovation period

4.2 Research methods

- Method of analysis and synthesis: This method is used in all chapters of the dissertation Specifically, it is used to learn and present phenomena, viewpoints, contents, elements of public company governance and the law on public company governance; analyze and draw out perspectives, regulations and operation of corporate governance and Vietnamese law on public company governance; thenceforth, the study presents assessment, conclusion, recommendations and suitable solutions to improve the provisions of the law

- Systematical method is used in all chapters and sections of the dissertation

to turn contents and each issue of the dissertation into a perfect whole with reasonable layout, coherence, inherit and develop issues and contents to achieve research purposes of the dissertation

3 Specifically, it is used to refer principles, practices and good guidelines on corporate governance and experiences in building and improving the law on public company governance of some countries around the world, and OECD’s corporate governance principles

5 New contributions of the dissertation

The dissertation is an intensive, comprehensive and systematic research work on the issues of corporate governance in general, the provisions of the existing law on public company governance in both theoretically and practically and expressed in the following contents:

- Examining systematically and interpret based on theoretical and practical basis of concepts, legal and scientific foundation, the law and issues related to public company governance

- Evaluating correctly and accurately the current status of the provisions of the law on public company governance in Vietnam It also points out inadequacies and shortcomings of this issue

- Examining experience of some countries around the world in building and improving the law on public company governance

- Identifying scientific arguments for improving the law of Vietnam on public corporate governance and propose some suggestions and solutions to improve the Vietnamese law on public company governance

6 Theoretical and practical significance of the dissertation

- Theoretically: The dissertation is a systematic, comprehensive and intensive research work on theoretical issues of public company governance

By modern and appropriate research methods, the study explains theoretical and practical issues, it analyzes and evaluates theoretical issues, basis and form

of the law on public company governance, thenceforth, it draws conclusions about the content of the law on public company governance in Vietnam today

- Practically: the dissertation makes objective comments and assessment, reasons and results as well as limitations of the law on public company governance The dissertation’s results, especially theoretical and practical issues in comparison to foreign law will contribute to making recommendations to ensure to correctly apply and build the provisions of the law on public companies consistent with the socio-economic development of Vietnam

The opinions and solutions to improve the Vietnamese law on public company governance in this dissertation may be a reference for legislators and competent authorities in completing the law on public corporate governance in Vietnam The dissertation is also a reference for studying, researching and teaching law on corporate governance

7 Structure of the dissertation

Besides the introduction, conclusion and references, the dissertation includes 4 chapters:

Chapter 1: Literature review

Chapter 2: The theoretical issues and the law on public company governance

Chapter 3: The reality of the law on public company governance in Vietnam

Chapter 4: Directions and solutions to improve the law on public company governance in Vietnam

Chapter 1 LITERATURE REVIEW 1.1 Research situation

1.1.1 Research works on theoretical issues on corporate governance

“Corporate governance” by Christine A Allin gave an overview of

corporate governance issues The author has summarized, analyzed and evaluated some basic theories on corporate governance, the role of shareholders and parties related to corporate governance, and studying ownership structure of types of companies; structure of internal governance such as the roles, powers and responsibilities of the Board of Management (BOM), Director, Chairman of BOM, members of BOM and secretary

“Theories of Corporate Governance The Philosophical Foundation of Corporate Governance” by Clarke T also has a similar approach

“Corporate Governance: Principles, Policies, and Practices” by Bob

Tricker and “Corporate Governance: Theories, Principles, and Practices” by

John Farrar referred to legal issues on corporate governance such as the distribution of power between BOM and General Meeting of Shareholders, the legal status of BOM, obligations of the manager; rights and obligations of shareholders; transparency and the role of auditors and the audit committee in corporate governance

“Comparative Company Law: Text and Cases on the Laws Governing

Donald and “European Comparative Company Law” by Mads Andenas and

Frank Wooldridge approached from the perspective of comparing law of countries in terms of establishment; types of companies in each country; equity capital and loan; management and administration; the involvement of employees in corporate governance

In addition to foreign documents, there are also many research works on

corporate governance in Vietnam “Corporate governance: improving

competitiveness and access to capital in the global market” by Ira M.Millstein,

Michel Albert, Sir Adrrian Cadbury, Transport Publishing House, 1998 This book is considered a report to submit to the OECD led by Ira M Milstein

“Monograph of economic law” by Pham Duy Nghia, Hanoi National

University Publishing House, 2004 This book gives an overview of Vietnam’s economic law, especially it introduces the concept and meaning of corporate governance “The law on enterprises – capital and management in the joint stock companies” by Nguyen Ngoc Bich (2004, 2009), Youth Publishing

House, HCMC This book presents what the law on enterprises stipulates on capital and management of joint stock companies In this book, the author explains the issues of corporate governance in one chapter (the author uses the term “driving the company”)

In sum, in these research works, the theoretical issues on corporate governance have been presented in detail, from different perspectives such as the history of corporate governance, theories of corporate governance, the concept of corporate governance, as well as elements and models of corporate governance and major contents of the law on corporate governance These research findings are the basis for comparison, analysis and evaluation in the dissertation so as to build a system of theoretical bases and grounds to assess practical activities and experiences to improve the law on public company governance in Vietnam

1.1.2 Research works on the reality of the law on corporate governance

Based on the theoretical basis of corporate governance, the book

“Corporate Governance: Theories, Principles, and Practices” by John Farrar

examines the provisions of the law on corporate governance based on the legal provisions on the roles of shareholders and parties related to corporate governance, rights and obligations to study the ownership structure of various types of companies and the internal governance structure By similarly approaching, the book “Corporate Governance: Principles, Policies, and

Practices” by Bob Tricker examines the legal provisions on corporate governance of the UK and the US, or the book “Corporate Governance: Theories, Principles, and Practices” by John Farrar examines the legal provisions on corporate governance of Australia and New Zealand These research works provide an overview of the provisions of the law on corporate

governance of countries as a basis for the dissertation to compare and learn experiences of other countries

By considering corporate governance as an internal element of the company, the book “Comparative Company Law: Text and Cases on the Laws

and David C Donald or the book “European Comparative Company Law” by

Mads Andenas and Frank Wooldridge provided an overview of the law on enterprises of German, the UK and the US, in which, they compare to provisions of the law on enterprises in each aspect of corporate governance of these countries

Foreign research works on corporate governance related to Vietnam, namely:

“Public Enforcement and Corporate Governance in Asia: Guidance and Good Practices”; Copyright OECD (2014) Corporate governance report on

the Observance of Standards and Codes (ROSC) - assessing the situation of corporate governance in Vietnam (June 2006) This report provides an assessment of the corporate governance framework of Vietnam including the fields of law and regulation, mechanism of inspection and enforcement, market and especially the stock market Report on corporate governance in the years (2011-2012; 2013-2014; 2015-2016) These reports are documents that reviewing the situation of corporate governance in Vietnam’s largest company,

in which, summarizing the strengths and weaknesses of the legal framework for corporate governance in each area (shareholder’s rights and basic ownership functions, equal treatment with shareholders, the role of stakeholders in corporate governance, information disclosure and transparency, responsibilities of the BOM)

“CEO & BOM - Handbook of modern corporate governance and management” by Nguyen Tri Hung, Nguyen Trung Thang - Ho Chi Minh City Publishing House, 2009 “Company - Capital, management and disputes under the 2005 Law on Enterprises” by Nguyen Ngoc Bich, Nguyen Dinh Cung, Knowledge Publishing House, 2009 In this book, the author studies the power structure in joint stock companies and shareholders and General Meeting of Shareholders, BOM, Director/Director General, Board of Controllers, self-interested transactions, and the control of company operations In order to clarify the content of the study, in addition to assess and review the actual

provisions of Vietnamese law on corporate governance, these authors have compared to good practices, legal provisions on corporate governance of several countries in the world from perspective of comparison, the book

“Corporate governance in East Asia after the 1997 crisis” by Truong Thi Nam Thang, National Economics University Publishing House, 2010 This book analyzed the regulatory frameworks for corporate governance of the listed and public companies in four East Asian countries, including Indonesia, South Korea, Malaysia and Thailand after the 1997 crisis, in which, referring legal reform of corporate governance in these countries

In short, above research works have generally assessed the legal framework

of corporate governance in several countries around the world and Vietnam, although these works have not intensively mentioned public company governance, from different perspectives, these research results are the basis for comparing, analyzing, evaluating and learning foreign legislative experience on corporate governance so that the dissertation makes the theoretical basis, as well as assessing the practice and experience to improve the law on the governance of public companies in Vietnam

1.1.3 research works propose solutions to improve the law on corporate governance

“Report on the Observance of Standards and Codes (ROSC): Corporate

scorecard on corporate governance over the years (2011-2012; 2013-2014;

Stock Exchange Based on the analysis and evaluation of the legal framework

on corporate governance in Vietnam, the Report makes a number of recommendations such as: Establishing better cooperation among management agencies and strengthening authority, human resources and independence of the Securities Commission; Improving the protection of minority shareholders, controlling transactions of relevant parties, changing the operational mechanism of the General Meeting of Shareholders; Establishing professionalism and operational efficiency of the BOM; Increasing transparency with the participation of independent auditors; publicity of ownership structure and management activities

“Scientific basis for perfecting the governance of joint stock companies

dissertation This study has examined corporate governance model based the company model that separating ownership from management rights, it then has introduced the content and operating mechanism of corporate governance compared to some relevant good practices, and has proposed solutions and recommendations to further improve the effectiveness of corporate governance

in Vietnam “Public corporate governance, listing for businesses and investors” by Le Minh Toan, National Political Publishing House, 2010 This

book has referred generally the listed corporate governance in Vietnam based

on the provisions of the existing law, as well as the current situation of the implementation of the provisions on corporate governance in Vietnam; factors affecting the compliance with the rules of the listed and public company governance in Vietnam Thenceforth, the author has proposed some recommendations for improving the law and solutions to enhance the efficiency of public company governance

In sum, the research results on corporate governance at home and abroad are quite diverse and plentiful Although such recommendations and solutions are general or the solutions related to a content of the law on public corporate governance, those research results may be considered a basis for the author can refer, compare, analyze and evaluate to build a theoretical and practical basis to assess the practice and experiences to improve the law on the governance of public companies in Vietnam nowadays

1.1.4 General assessment

1.1.4.1 Assessing the achieved research results

First, previous research works (especially foreign research works) have mentioned and analyzed some theoretical bases on corporate governance The research works have also provided a comprehensive view of corporate governance such as the position, role of good corporate governance in the economies; the concept and elements of corporate governance, good corporate governance practices; contents of the law on corporate governance, experience and the implementation of the legal framework on public governance

Second, the research works have approached and analyzed the contents of public corporate governance on the basis of legal regulations These analyses and studies continue to be evaluated and commented by the dissertation and

make its own comments about the legal provisions on public corporate governance in Vietnam

Third, some research works had a specific orientation to perfect the current legal framework for corporate governance in Vietnam, but they stop by generally reviewing or studying corporate governance from economic perspective, they have not really considered the issue of legal framework for public corporate governance and the gap between the provisions of the law and the law enforcement in practice

1.1.4.2 Pending questions or need to further examine in the dissertation

- The research task is that on the basis of scientific analysis of previous conceptions of corporate governance to introduce its conception of public company governance in Vietnam nowadays

- The specific contents of the legal structure of public corporate governance (in the world and Vietnam) need to be compared, analyzed and interpreted to clarify the differences and characteristics of this issue in Vietnam

- It is necessary to clarify the law contents on public company governance and determine the relationship of the groups stipulated in the corporate governance regulations

- Actual situation of applying the provisions of the law on public company governance in Vietnam

- Analyzing and clarifying mechanism of the law enforcement on public company governance stemming from the unique characteristics of the history and economic development process in Vietnam

- Proposing recommendations and solutions to improve the law and mechanism of law enforcement on the governance of public companies in practice in accordance with the current situation of Vietnam so that compliance with international standards and norms on public corporate governance

1.2 Theoretical basis, research questions and hypotheses

In addition, the study also utilizes theory of market economy; theory of legal entities, natural persons, theory of risks and risk control; theory of contract

1.2.2 Research questions and hypotheses

Q1: What is public corporate governance? Why do we need to adjust by law on the relationship of corporate governance? What are the legal structure

of public corporate governance?

H1: There should be a unified understanding of public corporate governance Thenceforth, referring interpretation needs to be adjusted by law for this relationship with the characteristics of public company governance Q2: Which corporate governance principles and good corporate governance practices are used as a reference for public corporate governance in Vietnam? H2: The OECD Code of Conduct is now widely applied, helping OECD member and non-member countries could assess and improve the legal, organizational and managerial framework for corporate governance in such countries and provide guidelines and recommendations for the stock market, investors, companies and relevant stakeholders in the process of developing good corporate governance

Q3: What is the content of the provisions of the existing law on public company governance in Vietnam? How does apply them in practice?

H3: Basically, the provisions of the existing law on public company governance in Vietnam have partly met the requirements of reality, and assessed to good practices of corporate governance in the world Actually, however, the application of these provisions is not effect, there are many limitations and inadequacies in the application process, even some contents have not been adjusted by the law

Q4: with the limitations and inadequacies mentioned above, what are the directions and solutions to improve and overcome?

H4: In order to complete the provisions of the law on public corporate governance in Vietnam, it is necessary to properly assess the real situation of applying these provisions in practice, and on the basis of studying experience

of improving the law on corporate governance in the world, including distinct characteristics originating from Vietnam’s history and economic development process

Conclusion of chapter 1