BOD professionalism and corporate governance key to sustainable growth

15:37 | 07/12/2018
A professional board of directors (BOD) propagating good corporate governance are said to play a key role in creating sustainable business development, which in turn helps the nation to move up the middle-income ladder.

How BOD can support companies’ pursuit of long-term sustainability in Vietnam’s fast-growing economy has been brought up at the discussions today at the Annual Corporate Governance Forum 2018 on “Governing for Sustainability.” The forum has been co-organised by the Vietnam Institute of Directors (VIOD) and the Vietnam Corporate Governance Initiative (VCGI), in partnership with the State Securities Commission of Vietnam (SSC), the Ho Chi Minh City Stock Exchange (HOSE), and the Hanoi Stock Exchange (HNX), and supported by the International Finance Corporation (IFC), Switzerland’s State Secretariat for Economic Affairs (SECO), and the Government of Japan.

bod professionalism and corporate governance key to sustainable growth
The Annual Corporate Governance Forum discussed how the BOD can facilitate sustainable growth

The forum is being held against the backdrop of Vietnam’s goal to join the group of higher middle-income countries through rapid and sustainable growth. To help achieve this target, businesses have a common interest in building a strategic vision for sustainable business, while balancing environmental and social factors. Ha Thu Thanh, board chairperson of VIOD and Deloitte Vietnam, said BODs have a key role to play in creating such sustainable business development strategies.

With BODs in Vietnam facing increasingly complex challenges in building a strategic vision for sustainable business while balancing environmental and social factors, the forum will help board members and senior executives learn more about global trends and good practices in sustainable development as well as create a valuable networking platform to connect and share experiences in corporate governance practices towards sustainable development for businesses.

“IFC has seen capital markets’ increased interest in how BODs respond to issues related to environmental and social impacts. The environment, society, and governance have become important factors in investors’ decisions,” said Kyle Kelhofer, IFC country manager for Vietnam, Cambodia, and Lao PDR.

“With clear links between good environmental and social performance and long-term profitability, boards that commit to sustainability best practices will be better positioned for greater investment and engagement from investors.”

A key factor contributing to a board’s performance is its diversity, especially as corporate governance best practices encourage diversity in gender, nationality, experience, occupation, and position.

“The diversity of board members supports them to evaluate issues from a variety of perspectives before making decisions and to complement each other to increase the effectiveness of the BOD,” said Vu Bang, member of the Prime Minister’s Advisory Group and Chairman of VCGI.

This annual forum underlines VIOD’s efforts to improve BOD professionalism in Vietnam, with good corporate governance playing a pivotal role in the sustainable development of businesses. VIOD and VCGI have also launched the 2018 Vietnam Corporate Governance Country Report and VIOD’s corporate membership programme for directors.

VIOD is an independent organisation, governed by a board of directors comprising of private sector representatives in collaboration with and supported by the SSC, HOSE, and HNX under VCGI. VOID seeks to promote corporate governance standards and best practices in the Vietnamese corporate sector.

VCGI, meanwhile, was launched in December 2016 by IFC, HOSE, and HNX with support from SSC. VCGI acts as a platform to collaborate and promote good governance practices in the Vietnamese corporate sector.

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By Minh Trang

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