Volume 11 - Volume 11
The Role of Supervisory Board in Corporate Governance in Vietnam: From Legal Regulations to Practice
Abstract
Good corporate governance is always associated with an effective internal control system, which is
expected to quickly forecast and detect the infringements of laws and the company's charters
committed by the main corporate governance bodies like the board of directors, the general director,
and provide timely advice on remedial solutions. Following this theory, since the adoption of the first
Vietnamese company law in 1990, the supervisory board, a special body of Vietnamese corporate
governance structure, has formed and become a traditionally internal control body in joint-stock
companies (JSCs). However, supervisory boards seem not to promote their effectiveness as expected.
Many major violations conducted by the board of directors and the CEO took place in large
companies, where the supervisory boards did not detect or were complicit in these violations. Most
recently, the trend of replacing supervisory boards with independent directors and audit committees
has occurred in many public companies in Vietnam. This paradox raises questions about the
ineffectiveness of supervisory boards and the reasons causing the situation. To find the answers, the
article will focus on analyzing the role of the supervisory board in Vietnamese JSCs compared with
international practices. Thereby, to find out the reasons for the limitations of supervisory boards in
both legal provision and practice. To conclude the research, the article will make some suggestions for
reforming the supervisory board so that this internal control body could bring its effectiveness.
Paper Details
PaperID: 2300
Author's Name: Dr. Phan Thi Thanh Thuy
Volume: Volume 11
Issues: Volume 11
Keywords: Corporate Governance, Joint-stock Company, Board of Directors, Supervisory board, Independent Director, Vietnam.
Year: 2021
Month: June
Pages: 2546-2563