The highlight was that last year Viet Nam had 50 listed companies meeting the standards set under the ASEAN Corporate Governance Scorecard. — Photo vinacorp

HCM CITY (VNS) — Corporate governance is the most important factor along with sustainable development in attracting investors, boosting capital markets and bringing benefits to the economies of ASEAN member countries, especially Viet Nam, delegates told a seminar here yesterday.

"A corporate governance scorecard in ASEAN was started in 2011, and this was a great effort by all Southeast Asian nations to implement the action plan of the ASEAN Capital Market Forum to develop integrated capital markets and define ASEAN as one of the best investment places in the world," Chris Razook, the International Finance Corporation (IFC)'s Asian – Pacific corporate governance programme manager told the Improving Corporate Governance Practices in ASEAN seminar.

The Scorecard is expected to improve corporate governance at listed companies in ASEAN, help them improve their competitiveness, popularise their identities among investors and boost their capability to raise capital in the market.

Viet Nam has been part of the programme since the outset, and at the seminar attendees said it had both achieved significant results and faced many challenges.

According to Viet Nam's State Securities Commission (SSC), since 2011 the country has taken action, encouraged changes and increased awareness among companies, improving quality of corporate governance, separating corporate and management boards and transparently reporting information.

The highlight was that last year Viet Nam had 50 listed companies meeting the standards set under the ASEAN Corporate Governance Scorecard.

Achievements

"For the last four years the HCM City Securities Exchange (HOSE) has issued regulations on corporate governance for listed enterprises, increased enforcement of these regulations and stepped up oversight of information put out by listed companies," Tran Anh Dao, a HOSE deputy managing director, said.

"In addition, HOSE has organised consulting and training courses for companies in complying with the corporate governance scorecard."

Despite all this, Viet Nam has not reached the target of having a minimum of 100 listed companies meeting Scorecard standards. Besides, it consistently ranks lowest among the six countries taking part in the ASEAN Corporate Governance Scorecard, the others being Indonesia, Malaysia, the Philippines, Singapore, and Thailand.

"Vietnamese companies are mostly former State-owned or family enterprises. Therefore, equitisation is a big step in their development that requires times and unceasing effort," Dr Nguyen Thu Hien, an academic who tracks the Scorecard, said.

"A big challenge for Viet Nam is to change companies' awareness, attitudes and actions," she said.

"Besides, more knowledge about the ASEAN Corporate Governance Score-card will enable enterprises to introduce themselves to international investors."

Dr Nguyen Thanh Long, deputy chairman of the SSC, said, "The Vietnamese securities market is considered safe and capable of attracting both domestic and international capital."

But he warned that improving corporate governance is the most important factor in attracting investment. The Scorecard, a programme instituted by the IFC, has become a tool for enterprises to fulfill their pledges about transparency in corporate governance and achieve sustainable growth. It has also helped investors keep tabs on their potential for development. — VNS