A forum held in HCM City on December 7 on corporate sustainability (Photo: VNA) HCM City (VNS/VNA) - Highly capable and diverse boards of directorsthat adhere to social responsibility are crucial for corporate sustainability,experts said during a forum in Ho Chi Minh City on December 7.
The forum was held by Vietnam Institute of Directors (VIOD) and VietnamCorporate Governance Initiative (VCGI), both of which focus on promoting goodcorporate governance practices.
Amar Gill, managing director of BlackRock, a New York-based global investmentmanagement corporation, said that to achieve corporate sustainability, acompany has to focus on its operation and long term vision, and examine itsmanagement capability and impact on the environment and society.
In addition to keeping the best interests of shareholders, boards of directorsneed to carefully monitor business strategy planning and implementation as wellas effective resource allocation.
Risk management regarding finance, business operations and climate change isalso crucial.
Gill also said that companies must keep track of their impact or “footprint” onthe environment and society and minimise the negative impact.
If not, they risk losing their “social licence to operate”, which refers tostakeholders’ acceptance of a firm’s business practices.
Vu Thi Thuan, chairwoman of Traphaco, a Vietnamese pharmaceutical company, saidthat companies should manage their risks well as investors always look to thefuture.
In the case of Traphaco, the company invested in its own ingredient zones toharvest high quality materials, because it could not afford a shortage ofmaterials or low quality ingredients.
She also said that awareness of the importance of climate change and managementto ensure sustainability should be improved.
Boards should also have diversity, including people of different backgroundsand experiences, and both men and women.
“The diversity of board members helps them evaluate issues from a variety ofperspectives before making decisions, and complements each other to increasethe effectiveness of the boards of directors,” said Dr. Vu Bang, a member ofthe Prime Minister’s Advisory Group and the chairman of VCGI.
However, Vu Quang Thinh, CEO and board member of Dynam Capital, whichspecialises in asset management, said that the diversity of many boards ofdirectors in Vietnam, especially in family-owned businesses, is limited.
Many boards of directors in Vietnamese companies are composed primarily ofrelatives, as opposed to fully independent members.
Many Vietnamese board members generally have similar backgrounds andexperiences, which mean they may be used to a limited number of ways ofoperating.
Vietnam’s corporate governance has seen improvement over the years due todevelopment of regulations and assistance from consultant firms and businessgroups, according to VIOD.
Nonetheless, it is still lackluster compared to other ASEAN countries. More regulationsto ensure clarity and fairness, as well as higher quality and responsibleboards of directors, are required. — VNS/VNA
The forum was held by Vietnam Institute of Directors (VIOD) and VietnamCorporate Governance Initiative (VCGI), both of which focus on promoting goodcorporate governance practices.
Amar Gill, managing director of BlackRock, a New York-based global investmentmanagement corporation, said that to achieve corporate sustainability, acompany has to focus on its operation and long term vision, and examine itsmanagement capability and impact on the environment and society.
In addition to keeping the best interests of shareholders, boards of directorsneed to carefully monitor business strategy planning and implementation as wellas effective resource allocation.
Risk management regarding finance, business operations and climate change isalso crucial.
Gill also said that companies must keep track of their impact or “footprint” onthe environment and society and minimise the negative impact.
If not, they risk losing their “social licence to operate”, which refers tostakeholders’ acceptance of a firm’s business practices.
Vu Thi Thuan, chairwoman of Traphaco, a Vietnamese pharmaceutical company, saidthat companies should manage their risks well as investors always look to thefuture.
In the case of Traphaco, the company invested in its own ingredient zones toharvest high quality materials, because it could not afford a shortage ofmaterials or low quality ingredients.
She also said that awareness of the importance of climate change and managementto ensure sustainability should be improved.
Boards should also have diversity, including people of different backgroundsand experiences, and both men and women.
“The diversity of board members helps them evaluate issues from a variety ofperspectives before making decisions, and complements each other to increasethe effectiveness of the boards of directors,” said Dr. Vu Bang, a member ofthe Prime Minister’s Advisory Group and the chairman of VCGI.
However, Vu Quang Thinh, CEO and board member of Dynam Capital, whichspecialises in asset management, said that the diversity of many boards ofdirectors in Vietnam, especially in family-owned businesses, is limited.
Many boards of directors in Vietnamese companies are composed primarily ofrelatives, as opposed to fully independent members.
Many Vietnamese board members generally have similar backgrounds andexperiences, which mean they may be used to a limited number of ways ofoperating.
Vietnam’s corporate governance has seen improvement over the years due todevelopment of regulations and assistance from consultant firms and businessgroups, according to VIOD.
Nonetheless, it is still lackluster compared to other ASEAN countries. More regulationsto ensure clarity and fairness, as well as higher quality and responsibleboards of directors, are required. — VNS/VNA
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