Vietnam is localising foreign CEOs

The decisions to appoint foreigners to the CEO post have been made by many Vietnamese enterprises in recent years.

In August 2008, Dong Tam Group appointed Etienne Lucien Laude, French nationality, as the CEO of the group, and Seiji Suzuki, Japanese nationality, as the deputy director to be in charge of BiC (Bess in Class) which aims to develop Dong Tam into a famous brand of regional stature.

Also in that year, local newspapers reported the appointment of Chad Ovel (the US) as the CEO of AA, an architecture and construction company. The board of directors of the company believes that the majority of AA’s clients are foreigners, which makes it a reasonable decision to choose Ovel.

Besides, FPT is hiring a Japanese CEO, and Bitexto is running with a South Korean CEO.

Especially, the banking sector has caught the special attention of the public with the appearance of a lot of new foreign CEOs. Mekong Bank chose Lau Boon Tuan (Singapore) as its CEO. The Vietnamese Techcombank’s CEO Nguyen Duc Vinh resigned after 12 years on the post of CEO, who has been replaced by a British Simon Morris. Meanwhile, Indian Atul Malik has taken over Maritime Bank.

Meanwhile, a company, specialising in leasing CEOs, has been set up to satisfy the increasingly high demand for foreign CEOs in Vietnam. According to Robert Tran, a business would have to pay $10,000 to hire a CEO from his company, or five times higher than the cost for hiring a consultant. However, the company still receives a lot of orders.

Analysts have commented that leasing CEOs is a prosperous type of business nowadays. Especially, nowadays, when Vietnamese bosses are getting richer, they would be ready to spend money to hire the CEOs who can bring them optimal profits.

The tendency of employing CEOs has been explained by the fact that Vietnamese business owners believe foreign CEOs have sufficient knowledge and experiences to help ease the current difficulties of enterprises or settle the problems.

In many cases, the bosses made right decisions when choosing foreign CEOs. After the first year on the post of CEO, the Singaporean Lau Boon Tuan raised the chartered capital of Mekong Bank to VND750 billion, generated the profit which was 39 per cent higher than planned, and he has been re-appointed as the CEO of the bank until 2017.

With 25-year experience in the banking sector, Atul Malik, who once held the post of CEO at Citibank and Deutsche Bank, has committed to raise the chartered capital of Maritime Bank by VND1 trillion, increase the profit by 30.2 per cent and successfully control bad debts.

Meanwhile, Michael Cluzel, the new CEO of Beeline, has succeeded in increasing the number of Beeline subscribers by 6.67 times.

However, in many other cases, qualified CEOs still could not improve the business performance of some companies.

Foreign CEOs have deep knowledge and experiences, but they do not well understand the situation in Vietnam, do not get familiar to the Vietnamese business culture, and especially, do not understand Vietnamese customers. Therefore, they had to leave the companies after a period trying to get adapted with them.

This happens all the time in the world. After the continued failures with the loss of up to $1.2 billion, the US CEO Howard Stringer had to resign from his post at Japanese Sony Group. The British Michael Woodford was sacked just after two weeks. Most recently, the US CEO Craig Naylor resigned because of the disagreements with the strategy put forward by Nippon.