SOEs must enhance corporate governance

Products of Vinamilk, an State-owned enterprise which focuses on enhancing corporate governance to improve operation efficiency. - Photo sggp.org.vn

“Good governance is the root of the restructuring of SOEs. This is the key to renovating SOEs and improving their efficiency.”

Hieu said that the foundation of the Committee for Management of State Capital was a solution to improving SOEs’ operation efficiency because the committee would separate State capital ownership from corporate governance. The committee was expected to set up an efficient corporate governance framework at SOEs and the workload would be heavy for the committee.

According to Hoang Truong Giang from the Central Economic Commission, it is necessary to identify the roles of SOEs in the economy as a base to develop a long-term SOE development strategy.

Giang said that the Government must create a fair business environment for all economic sectors.

Economic expert Can Van Luc said it was critical to push SOEs which were equitised to list on stock exchanges to enhance corporate governance and improve transparency and operate as public companies.

Luc said that Vietnam could study the Organisation for Economic Co-operation and Development’s principles of corporate governance and experiences of other developed economies.

Luc said that national dairy firm Vinamilk was an example for the success of SOEs’ restructuring, which focused on improving transparency, applying the best corporate governance principles and enhancing corporate social responsibility.

If SOEs had good governance, opportunities would come, Luc said.

According to Pham Tuan Anh from the University of Commerce, the most important factor in corporate governance is human governance and SOEs must attach special attention to this.

Tuan Anh stressed that the saying “No pain, no gain” was true for restructuring SOEs, adding that restructuring SOEs would be a thorny process.

Deputy Chairman of the National Financial Supervisory Committee Nguyen Van Khach said that it was necessary to build a corporate governance system approaching international practices and gradually applied for privatised SOEs.

At the same time, SOEs must enhance their transparency and supervisory capacity.

For SOEs which have just been privatised, focus must be placed on pushing up listing on stock exchanges and attracting strategic investors and creating favourable conditions for strategic investors to participate in the corporate governance and restructuring to improve efficiency, according to Khach.

Khach said at the conference held by the Economics and Forecast Magazine that the results of SOEs restructuring in Viet Nam was still far below expectations with slow capital divestment, privatisation and listing on stock exchanges.

Statistics of the Ministry of Finance showed that as of November 15, there were 677 SOEs already privatised but not listed on exchanges.

The current regulation was that privatised SOEs must be listed on exchanges within one year of privatisation.

The transparency at SOEs was also limited, with only 42 per cent of 622 SOEs submitting reports to the Ministry of Planning and Investment to be publicised on the national enterprise portal in 2017, a slight increase from 38.9 per cent in 2016, the ministry’s statistics showed.