Who Runs the Company When the Chairman of the Board Is Detained?

Short answer: When the Chairman of the Board of Directors is detained and unable to manage, the law provides two layers of replacement mechanisms: (1) the Chairman authorizes in writing another Board member to exercise his or her rights and obligations; (2) if no authorization is possible, the remaining Board members elect one person to temporarily hold the position of Chairman by majority vote. The company is not left “ownerless” — the Board of Directors remains the body with full authority to manage the company.

Legal basis

• Articles 155–157 of the Law on Enterprises 2020 — Chairman of the Board of Directors; dismissal and removal of Board members.

Mechanism for replacing the Chairman of the Board

1. Authorization: Where the Chairman is absent or unable to perform his or her duties, he or she must authorize in writing another Board member to exercise the rights and obligations of the Chairman;
2. Temporary election: Where there is no authorized person, the remaining Board members elect one of them to temporarily hold the position of Chairman by majority vote;
3. The authorized/temporarily elected person fully exercises the rights to convene and chair Board meetings and other rights of the Chairman.

What if the Board no longer meets the minimum number?

• A joint-stock company must have a Board of Directors of 3 to 11 members;
• If the remaining Board members do not meet the minimum number prescribed or in the charter, the Board must convene the General Meeting of Shareholders within 60 days to elect additional members;
• Pending the supplementary election, the remaining members continue to perform the necessary work to maintain the company’s operations.

Should the Chairman be dismissed/removed?

• The GMS has the right to dismiss or remove Board members and the Chairman under Article 160 of the Law on Enterprises 2020;
• Dismissal/removal does not invalidate transactions the Chairman lawfully entered into beforehand;
• If the Chairman is also the legal representative: the company must register the change of legal representative under Decree 168/2025/ND-CP so that transactions are not disrupted.

Recommendations for enterprises

• The charter should provide in advance for the authorization mechanism and temporary election of the Chairman to handle crises quickly;
• Review contracts and bank accounts requiring the Chairman’s signature to have timely replacement plans;
• Consult a lawyer before dismissal/removal to ensure proper procedures.

If you need to determine the option best suited to your specific situation, you should discuss it with a lawyer in advance for dossier review and advice on the handling plan.

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

Related articles

• Who has the right to appoint the director of a joint-stock company?
• The legal representative of an enterprise
• Rights and obligations of the Board of Directors of a joint-stock company