Can a joint stock company's controllers be re-appointed without term limit in Vietnam?

1. Can a joint stock company's controllers be re-appointed without term limit in Vietnam?

Article 65 of the Enterprise Law 2020 stipulates that the Supervisory Board and Supervisors are as follows:

1. The Board of Controllers shall have 1 – 5 Controllers. The term of office of a controller shall not exceed 05 years and without term limit. In case the Board of Controllers only has 01 controller, he/she shall be the Chief Controller and shall satisfy corresponding conditions.

2. The Chief Controller and Controllers shall satisfy the requirements specified in Clause 2 Article 168 and Article 169 of this Law.

3. Rights, obligations, responsibilities, dismissal and works of Controllers and the Board of Controllers are specified in Articles 106, 170, 171, 172, 173 and 174 of this Law.

4. The Government shall elaborate this Article.

Thus, according to the above provisions, the term of office of a controller in Vietnam shall not exceed 05 years and without term limit. When re-appointing the position of Controller of a joint-stock company, you can appoint for an indefinite term.

2. What are requirements to be satisfied by Controllers of joint stock companies in Vietnam?

According to Article 169 of the Enterprise Law 2020, requirements to be satisfied by Controllers are as follows:

1. A Controller shall satisfy the following standards and requirements:

a) He/she is not in one of the persons specified in Clause 2 Article 17 of this Law;

b) His/her major is  economics, finance, accounting, audit, law, business administration or a major that is relevant to the enterprise’s business operation;

c) He/she is not a relative of any of the members of the Board of Directors, Director/General Director and other executives;

d) He/she is not the company’s executive, is not necessarily a shareholder or employee of the company unless otherwise prescribed by the company's charter;

dd) Other standards and requirements are satisfied as prescribed by law and the company's charter.

2. In addition to the standards and requirements specified in Clause 1 of this Article, Controllers of a public company or state-owned enterprise prescribed in Point b Clause 1 Article 88 of this Law must not be relatives of the executives of the company and the parent company; of the representative of enterprise’s investment or state investment in the company and the parent company.

The above are the standards and conditions of Controllers of a joint-stock company in Vietnam that must be present.

3. What are responsibilities of Controllers of joint stock companies in Vietnam? 

Pursuant to Article 107 of the Enterprise Law 2020, responsibilities of Controllers of joint stock companies:

1. Comply with regulations of law, the company's charter, decisions of the state ownership representative body and the code of ethics in performance of their rights and obligations.

2. Exercise and perform their rights and obligations in an honest and prudent manner to protect the lawful interests of the State, the company the parties.

3. Be loyal to the interests of the company and the State; do not abuse their power and position or use the enterprise’s information, secrets, business opportunities and assets for personal gain or serve any other organization’s or individual’s interests;

4. The Controller that violates the regulations of this Article and causes damage to the company shall be personally or jointly pay compensation, be held liable to disciplinary actions, administrative penalties or criminal prosecution depending on the nature and severity of the violation and have to return the incomes and benefits earned from the violation.

5. Send a notification to the state ownership representative body of violations committed by another Controller and request the violator to stop the violation and implement remedial measures.

6. Request the violator to stop the violation and implement remedial measures, and notify to the state ownership representative body, other Controllers and relevant individuals in the following cases:

a) A member of the Board of Members, the company’s President, the Director/General Director or another executive violates or is going to violate regulations on their rights and obligations

b) Violations against the law, the company's charter or the company’s rules and violations are discovered.

7. Other responsibilities prescribed by this Law and the company's charter.

The above are the responsibilities of Controllers of a joint-stock company in Vietnam.

Best Regards!