The level of corporate governance in Vietnam is currently low.

According to DNVN - the Vietnam Institute of Directors (VIOD), Vietnam's corporate governance standards are currently low within the ASEAN region, falling below the average level in the ASEAN Corporate Governance Scorecard (ACGS) assessment.

The 7th Annual Corporate Governance Forum, themed "Investing in Corporate Governance: Strategies to Attract Responsible Investors in the Internationalization of the Market," held on the morning of November 29th, provided the latest assessment of corporate governance, helping businesses develop more relevant and in-depth action programs. The event also contributed to proposing solutions to promote a more transparent and attractive Vietnamese financial and securities market for both domestic and foreign investors.

According to VIOD's assessment at the forum, 2024 marks a significant turning point in improving corporate governance quality in Vietnam. As corporate governance requirements increase, investing in effective governance linked to ESG (environmental, social, and corporate governance) is not just an option but has become a crucial need for businesses, especially listed companies and public companies.

The 7th Annual Forum on Corporate Governance, themed "Investing in Corporate Governance: Strategies for Attracting Responsible Investors in the Trend of Market Internationalization".

Investors, especially international investment funds, are focusing on and shifting sustainable investments to businesses that implement corporate governance practices linked to measuring their environmental and social impact. Corporate governance is considered a crucial channel for channeling capital into the market and into businesses.

Corporate governance linked to ESG has now become a measure of a company's competitiveness in building trust with the market and suppliers, and a tool for measuring a company's actions and commitments to creating environmental and social impact. It also forms the foundation for enhancing transparency and accountability when implementing sustainable development strategies.

However, according to VIOD, Vietnam's current corporate governance level is low within the ASEAN region; lower than the average level in the ASEAN Corporate Governance Scorecard (ACGS) assessment.

Therefore, the need to improve the quality and standards of corporate governance in Vietnam should be seriously considered a crucial strategic goal and given top priority. This has also been clearly stated in the strategy for developing the stock market until 2030, approved by the Prime Minister in Decision 1726/QD-TTg dated December 29, 2023.

Improving the quality and standards of corporate governance not only attracts investment capital from international investment funds but also creates a foundation for sustainable development of the stock market itself. This is especially important in the context of Vietnam's efforts to upgrade from a frontier market to an emerging market.

This context presents Vietnamese businesses with the challenge of finding ways to improve corporate governance quality, meet international standards, and attract green investment from responsible investors. Simultaneously, it aims to narrow the gap in corporate governance standards between Vietnam and the rest of Southeast Asia.

At the forum, VIOD first announced the VNCG50 initiative. This is a scorecard system built on ACGS evaluation indicators based on best practices, and also on corporate governance practices in Vietnam.

The VNCG50 index is evaluated by a panel of experts from the Ho Chi Minh City Stock Exchange (HOSE), the Hanoi Stock Exchange (HNX), representatives of funds, securities companies, and independent experts.

Ha Anh

Source: https://doanhnghiepvn.vn/kinh-te/mat-bang-quan-tri-cong-ty-cua-viet-nam-dang-o-cap-do-thap/20241129110511196