What are regulations on method for election, dismissal and discharge of members of the Board of Directors in public companies in Vietnam?

1. What are regulations on method for election, dismissal and discharge of members of the Board of Directors in public companies in Vietnam?

Pursuant to the provisions of Article 9 Chapter II Appendix III issued together with Circular 116/2020/TT-BTC, the method for election, dismissal and discharge of members of the Board of Directors in a public company are as follows:

1. The shareholder or group of shareholders that holds at least [10%] of total ordinary shares or [a smaller amount specified in the Company’s Charter] is entitled to nominate candidates to the Board of Directors. Unless otherwise prescribed by [the Company’s Charter], candidates shall be nominated as follows:

a) The group of shareholders that nominate candidates to the Board of Directors must inform the participating shareholders of the meeting before the opening of the GMS;

b) Depending on the quantity of members of the Board of Directors, the shareholders or groups of shareholders prescribed I this Clause may nominate one or a number of candidates according to the decision of the GMS to the Board of Directors. In case the number of nominated candidates is smaller than the number specified in the decision of the GMS, the remaining candidates shall be nominated by Board of Directors and other shareholders.

2. In case the number of candidates is smaller than the minimum number specified in Clause 5 Article 115 of the Law on Enterprises, the incumbent Board of Directors shall nominate more candidates or organize the nomination in accordance with the Company’s Charter, company administration regulations and regulations  on operation of the Board of Directors. This must be announced before the GMS starts to vote for members of the Board of Directors as prescribed by law.

3. [Unless otherwise prescribed by the Company’s Charter], the voting on members of Board of Directors shall be carried out by cumulative voting. This means each shareholder has a number of votes that is equivalent to their shares multiplied by the number of members of the Board of Directors, and may caste all or some of the votes for one or some candidates. Elected members of the Board of Directors shall be chosen according to number of votes received in descending order until the minimum number specified in the Company’s Charter is reached. In case 02 or more candidates for the last member of the Board of Directors receive the same number of votes, they will undergo another voting or be selected according to the voting regulations of the Company’s Charter.

4. The election, dismissal and discharge of members of the Board of Directors shall be decided by the GMS by voting.

2. What are regulations on announcement of election, dismissal and discharge of members of the Board of Directors in public companies in Vietnam?

Pursuant to Article 10, Chapter II, Appendix III issued together with Circular 116/2020/TT-BTC, announcement of election, dismissal and discharge of members of the Board of Directors in public companies as follows:

1. After candidates for members of the Board of Directors have been nominated, the Company shall publish information about these candidates at least 10 days before the opening date of the GMS on the Company’s website for the shareholders to study their profiles before voting. Each candidate shall prepare a written declaration that information about him/her is correct and to perform his/her duties in an honest and prudent manner for the best interests of the Company if he/she is given the position of member of the Board of Directors. Information about candidates includes:

a) Full name, date of birth;

b) Qualifications;

c) Work experience;

d) Other managerial positions (including positions in the Board of Directors of other companies);

dd) Interests relevant to the Company and the Company’s related parties;

e) Other information (if any) specified in the Company’s Charter;

g) The public company shall publish information about the companies in which the candidates are holding the position of members of the Board of Directors and other managerial positions and their interests in these companies (if any).

2. The results of election, dismissal and discharge of members of the Board of Directors shall be announced in accordance with regulations on information disclosure.

Best Regards!