IFC is helping the SSC develop a corporate governance code for listed firms to help local firms attract capital and make them more competitive in an environment of increasing regional economic integration. — Photo bccjapan.com

With the aim to improve corporate governance in Viet Nam, IFC, a member of the World Bank Group, is helping the State Securities Commission of Vietnam (SSC) to develop such code, said the two sides in a workshop on August 29 in Ha Noi, to kick off the development process.

Participants included representatives from SSC, the two stock exchanges HNX and HOSE, and other stakeholders. The workshop provided an update on corporate governance codes from around the world and facilitated discussion on the relevant approach for Vietnam.

Pham Hong Son, SSC deputy chairman said "the corporate governance code will help strengthen competitiveness of Vietnamese listed firms through adoption of internationally recognized corporate governance practices."

Son also said the code would guide listed firms on how to adopt best corporate governance practices that go beyond regulatory compliance for better capital-market integration with Association of Southeast Asian Nations (ASEAN) countries and globally.

Participants heard experiences of code development from Organization for Economic Cooperation and Development (OECD) countries and regional nations such as China, Indonesia, Thailand, the Philippines, and Malaysia.

Chris Razook, IFC Regional Head for Corporate Governance Advisor, East Asia and the Pacific said though there some firms in Viet Nam doing really well, however, compared to the region, the market's corporate governance was still lagging behind in scorecard rankings in areas such as disclosure practices, board structure and functioning, and controlling and risk practices.

According to the ASEAN corporate governance scorecard, Viet Nam ranked the lowest among six regional countries of Indonesia, Malaysia, Philippines, Singapore and Thailand between 2012 and 2014.

To the local firms, the code would provide them with a benchmark, said Chris, adding that good governance standard was the attraction that eye investors, boost their confidence to invest in the firm, especially when they want to have more international business partners, who would watch the change closely for their investment.

We will work with the SSC to set up the code as well as to educate about it to the market, said Chris, who thought more than just setting the code, it was more important to encourage firms to apply the code for their better future, and to "make it really work in a company"

The code is expected to be launched by mid-2017. IFC's support for the development of a corporate governance code is part of its overall efforts to promote corporate governance in Vietnam in partnership with the State Secretariat for Economic Affairs of Switzerland (SECO).

IFC has contributed to the adoption of 95 corporate governance codes, laws, and regulations in more than 30 countries worldwide. — VNS