Contents of public company administration in Vietnam

Contents of public company administration in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Contents of public company administration in Vietnam

Contents of public company administration in Vietnam according to Article 41 of the Law on Securities 2019 are as follows:

- Shareholders of a public company shall:

= Have the right to equal treatment;

= Have accessibility to information periodically and irregularly published by the company as prescribed by law;

= Have their the lawful rights and interests protected; have the right to request suspension or cancellation of a Resolution or decision of the General Meeting of Shareholders or Board of Directors as prescribed by the Law on Enterprises;

= Not take advantage of the major shareholder’s status to influence rights and interests of the company and other shareholders as prescribed by law and the company’s charter; disclose information as prescribed by law;

= Have other rights and obligations prescribed by law and the company’s charter.

- The General Meeting of Shareholders shall be convened and organized as follows:

= The Board of Directors, the Board of Controllers and the convener shall follow the procedures for convening the General Meeting of Shareholders specified in the Law on Enterprises, the company’s charter and the company administration regulations; prepare the place and set a reasonable time for the shareholders to attend the General Meeting of Shareholders;

= The company administration regulations shall provide for application of information technology to enable shareholders to attend meetings online, vote electrically or through another method as prescribed by the Law on Enterprises and the company’s charter;

= The public company shall invite representatives of the accredited audit organization that audited its annual financial statement to attend the annual General Meeting of Shareholders in case the audit report contains qualified opinions;

= Other regulations of law and the company’s charter shall be complied with.

- Composition and responsibilities of the Board of Directors:

= There should be a balance between the number of executive members, non-executive members and independent members of the Board of Directors of a public company in order to ensure its independence;

= The Board of Directors shall be accountable to the shareholders for the company’s operation; ensure the company’s compliance with law, its charter and internal regulations; develop the internal regulations on company administration and submit it to the General Meeting of Shareholders for approval; designate executive officers; and have other responsibilities prescribed by law and the company’s charter;

= The Board of Directors shall hold a meeting at least once per year following the procedures specified in the company’s charter and the company’s administration regulations. The organization, agenda and documents of a meeting of the Board of Directors shall be informed in advance to its members as prescribed by law and the company’s charter.

- Designation and nomination of members of the Board of Directors shall comply with the Law on Enterprises, relevant laws and the following regulations:

= The public company shall disclose information about the candidates for members of the Board of Directors at least 10 days before its meeting date on the company’s website;

= In case the quantity of candidates is not sufficient as prescribed by the Law on Enterprises, the current Board of Directors may nominate additional candidates or hold a nomination as prescribed by the company’s charter and the company’s administration regulations.

- Members of the Board of Directors shall:

= Be provided with information and documents about the financial status and performance of the company and its units;

= Perform their duties in a truthful and cautious manner for the best interests of the company and its shareholders;

= Fully attend meetings of the Board of Directors and comment of the raised issues;

= Fully and promptly inform the Board of Directors of the incomes from the subsidiaries, associate companies and other organizations;

= Report and disclose information when trading the company’s shares as prescribed by law;

= Have other rights and obligations prescribed by law and the company’s charter.

- A public company shall comply with the following regulations on transparency and prevention of conflict of interest:

= Members of the Board of Directors, Controllers, the General Director (Director) and other executive officers shall disclose their related interests; must not use the information that is obtained due to their positions for selfish purpose or to serve other organizations or individuals;

= The public company shall implement necessary measures to prevent members of the Board of Directors, Controllers, the General Director (Director), other executive officers, shareholders and related person from interfering with the company’s operation, causing damage to the company; ensure compliance to regulations on transaction with shareholders, executive officers and their related persons; protect the lawful rights and interests of people with relevant interests;

= The public company shall fully, accurately and promptly provide periodic and irregular information and about the company’s business operation, finance and administration, and other information for the shareholders and the public if such information may affect the securities prices, shareholders’ and investors’ decision making;

= The information disclosed and method of information disclosure shall comply with this Law, the company’s charter and regulations on information disclosure.

2. Rules for administration of public companies in Vietnam

According to Article 40 of the Law on Securities 2019, administration of public companies shall comply with regulations of the Law on Securities 2019, the Law on Enterprises, relevant laws and the following rules:

- The administration structure shall be reasonable and effective;

- Ensure effectiveness of the Board of Directors and the Board of Controllers; strengthen the accountability of the Board of Directors to the company and its shareholders;

- Ensure the rights and equality of shareholders;

- Ensure the roles of investors, the securities market and intermediate organizations in assisting the company administration;

- Respect and protect the lawful rights and interests of the parties in company administration;

- Punctually, adequately, accurately and transparently disclose information about the company’s operation; ensure equal accessibility of information to all shareholders.

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