Hanoi, Vietnam – A new report by IFC, a member of the World Bank Group, calls on Vietnam’s companies to strengthen corporate governance in order to enhance their competitiveness and attract local and foreign capital as they work to expand their businesses amid a tough economy.
The Corporate Governance Scorecard for Vietnam 2012 reviewed the corporate governance practices of the top 100 companies listed on the Hanoi and Ho Chi Minh City stock exchanges. The results, released today, show that the average corporate governance score dropped 2.2 percentage points to 42.5 percent from last year, indicating that Vietnamese companies need to step up their efforts in the push for better corporate governance.
The report finds that existing corporate governance rules and regulations in Vietnam are often insufficiently implemented. The report urges companies to further raise their awareness of the importance of good governance practices, such as paying more attention to protecting the rights of shareholders and stakeholders, improving the company’s disclosure and transparency, and making the board accountable for risk oversight. Regulators also need to strengthen visible monitoring and enforcement to help the companies change.
Corporate governance is a competitive advantage for companies said Simon Andrews, IFC’s regional manager for Cambodia, Lao PDR, Myanmar, Thailand and Vietnam. Adopting international standards of corporate governance and ensuring accountability and transparency in decision-making improves a company’s ability to access finance and reduces its cost of capital. This gives a company a critical advantage in today’s competitive economic environment
This is the third 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 Canada, Finland, Ireland, Japan, New Zealand, Switzerland, and the Netherlands.
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, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit www.ifc.org.
Information Source: WEBWIRE