Hanoi, Vietnam, December 7, 2011—
A new report by
IFC,
a member of the World Bank Group, calls for a stronger commitment to corporate governance from Vietnam’s companies to make them more competitive in attracting investments and better able to contribute to Vietnam’s economic growth.
The
Corporate Governance Scorecard for Vietnam 2011
released today urges for improvements in the rights and treatment of shareholders and stakeholders, the roles and responsibilities of a company’s board, especially its accountability for risk oversight, as well as better disclosure and transparency.
The report reviewed corporate governance practices of the 100 largest companies listed on the Hanoi and Ho Chi Minh City stock exchanges. While the average corporate governance score rose slightly to 44.7 percent in 2010 from 43.9 percent in 2009, it is short of the 80 percent score needed for a company to be considered to have met global best practices.
“Adoption of better corporate governance practices and code will help enhance companies’ ability to attract higher quality of capital at a lower cost,” said Simon Andrews, IFC Regional Manager for Vietnam, Cambodia, Lao PDR, and Thailand. “We expect that the scorecard will help companies and regulatory agencies identify strengths and weaknesses in corporate governance practices, leading to further reforms in this area at both the company and regulatory level.”
Vietnamese companies are still in the early stages of adopting international corporate governance standards and best practices. The report says corporate governance continues to be practiced largely to meet regulatory requirements rather than as a voluntary effort to improve business practices.
This is the second Corporate Governance Scorecard produced by IFC's Vietnam Corporate Governance Project and the Global Corporate Governance Forum, in partnership with the State Securities Commission of Vietnam and the governments of Finland, Ireland, Japan, the Netherlands, New Zealand, and Switzerland.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal 2011, amid economic uncertainty across the globe, we helped our clients create jobs, strengthen environmental performance, and contribute to their local communities—all while driving our investments to an all-time high of nearly $19 billion. For more information, visit
www.ifc.org
.
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