Will the Chairperson of the Board of Members Be Dismissed if an SOE Fails to Meet Its Annual Plan Targets?

Will the Chairperson of the Board of Members of a state-owned enterprise be dismissed if the enterprise fails to meet its annual plan targets?

Cases in which the Chairperson of the Board of Members of a state-owned enterprise is dismissed are prescribed in Clause 2, Article 94 of the Law on Enterprises 2020 as follows:

Removal and dismissal of members of the Board of Members

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2. The Chairperson and other members of the Board of Members shall be dismissed in the following cases:

a) The company fails to meet annual plan objectives and targets, fails to preserve and develop investment capital as required by the owner’s representative agency, without being able to explain objective causes, or with explanations not accepted by the owner’s representative agency;

b) Being convicted by a Court and the Court’s judgment or decision has taken legal effect;

c) Being dishonest in exercising rights and obligations, or abusing position and office, using the company’s assets for self-interest or to serve the interests of other organizations or individuals; reporting dishonestly on the company’s financial situation and production and business results.

Pursuant to the above provisions, where a state-owned enterprise fails to meet its annual plan targets and, as required by the owner’s representative agency, the Chairperson of the Board of Members cannot explain the objective causes or provides explanations not accepted by the owner’s representative agency, the Chairperson may be dismissed.

What rights and obligations does the Chairperson of the Board of Members of a state-owned enterprise have?

Pursuant to Clause 2, Article 95 of the Law on Enterprises 2020, the Chairperson of the Board of Members of a state-owned enterprise has the following rights and obligations:

(1) Developing quarterly and annual activity plans of the Board of Members.

(2) Preparing the agenda, contents and documents for meetings of the Board of Members, or collecting opinions of members of the Board of Members.

(3) Convening, presiding over and chairing meetings of the Board of Members, or organizing the collection of opinions of members of the Board of Members.

(4) Organizing the implementation of decisions of the owner’s representative agency and resolutions of the Board of Members.

(5) Organizing supervision, directly supervising and evaluating the implementation of strategic objectives, the company’s operational results, and the management and administration results of the company’s Director or General Director.

(6) Organizing the publication and disclosure of information about the company in accordance with the law; being responsible for the completeness, timeliness, accuracy, truthfulness and systematic nature of the published information.

In which acts does the Chairperson of the Board of Members of a state-owned enterprise bear personal responsibility?

Acts for which the Chairperson of the Board of Members of a state-owned enterprise bears personal responsibility are prescribed in Article 97 of the Law on Enterprises 2020 as follows:

Responsibilities of the Chairperson and other members of the Board of Members

1. Comply with the company charter, decisions of the company owner and the law.

2. Exercise rights and obligations honestly, prudently and in the best manner to ensure the maximum legitimate interests of the company and the State.

3. Be loyal to the interests of the company and the State; not abuse position and office or use the company’s information, know-how, business opportunities and other assets for self-interest or to serve the interests of other organizations or individuals.

4. Promptly, fully and accurately notify the enterprise of enterprises in which they are owners or hold controlling shares or capital contributions, and enterprises in which their related persons are owners, co-owners or sole owners of controlling shares or capital contributions. Such notices shall be compiled and kept at the company’s head office.

5. Comply with resolutions of the Board of Members.

6. Bear personal responsibility when performing the following acts:

a) Using the company’s name to commit acts in violation of the law;

b) Conducting business or other transactions not serving the company’s interests and causing damage to other organizations or individuals;

c) Paying debts that are not yet due when there is a risk of financial risk to the company.

7. Where a member of the Board of Members discovers that another member of the Board of Members has committed violations in exercising assigned rights and obligations, they shall report in writing to the owner’s representative agency; request the violating member to stop the violation and remedy the consequences.

Accordingly, the Chairperson of the Board of Members of a state-owned enterprise bears personal responsibility when performing the following acts:

• Using the company’s name to commit acts in violation of the law.
• Conducting business or other transactions not serving the company’s interests and causing damage to other organizations or individuals.
• Paying debts that are not yet due when there is a risk of financial risk to the company.

Notes on applying current legal provisions

This article belongs to the Enterprise Knowledge group and is presented for reference, helping readers understand the legal issue at an overview level before preparing dossiers or conducting transactions.

Legal provisions may change depending on timing, locality, dossier type and specific circumstances. Where it is necessary to determine the exact legal basis applicable to your dossier, you should contact an ANT Legal lawyer at 0966.475.966 for review and advice before proceeding.

Common risks to note

• Applying legal texts that have been amended, supplemented or replaced.
• Preparing incomplete dossiers, documents or evidence.
• Misunderstanding the applicable conditions, procedures, time limits or competent authority.
• Signing, filing or conducting transactions without fully assessing legal risks.

How can ANT Legal help?

ANT Legal assists in reviewing specific situations, checking dossiers, identifying the applicable legal basis, advising on handling plans, and representing you in working with individuals, organizations or competent authorities when necessary.

For quick advice, you may contact a lawyer at 0966.475.966.

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